Discussing the latest NAR Existing Home Sales Report and what is happening in Anderson County, home price growth, the outlook for housing plus much more!
Existing Home Sales Flat
Existing-home sales remained steady in August after four straight months of decline. Total existing-home sales were unchanged from July but were down 1.5% from a year ago.
The median existing-home price for all housing types in August 2018 was up 4.6% from August 2017. This is the 78th straight month of year-over-year gains.
Total housing inventory at the end of August also remained unchanged from July but up from a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, consistent from last month and up from 4.1 months a year ago.
The keys are that home sales were down compared to the previous year, home prices are still rising YoY and last but not least, inventory increased YoY.
Of course, this is talking about the entire US and you must always look at what is happening in your local market. If we look compare the WUAR data for homes sold in Anderson County during August 2018 to August 2017, home sales were down 5.37% and the median price was up only 0.62%.
But this is talking about ALL homes sold in Anderson County and still won’t tell you everything you need to know when buying or selling. If you have any questions about real estate in Anderson County, Contact Me!
Homes in Lower Price Ranges Appreciate Faster
Last week, I shared the news from CoreLogic’s latest Home Price Insights report. One tidbit that I did not cover is how different home prices increase in different price ranges.
Check out this chart showing 5-year change in price from July 2013 to July 2018 by price range:
Strong demand and lack of inventory of homes in the lower price ranges is driving the strong price growth. Home prices are predicted to grow by 20% over the next 5 years according to the latest Pulsenomics Home Price Expectation Survey.
Pretty encouraging news and for anyone wanting to buy a home, this should motivate them to get the lead out!
Conference Board Leading Economic Index Increased
From the Conference Board:
The Conference Board Leading Economic Index® (LEI)for the U.S. increased 0.4% in August, following a 0.7% increase in July, and a 0.5% increase in June. The leading economic index is now well above its previous peak back in March 2006.
Good news for the economy and we could see continued growth in 2018 according to Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board:
The leading indicators are consistent with a solid growth scenario in the second half of 2018 and at this stage of a maturing business cycle in the US, it doesn’t get much better than this. The US LEI’s growth trend has moderated since the start of the year. Industrial companies that are more sensitive to the business cycle should be on the lookout for a possible moderation in economic growth in 2019. The strengths among the LEI’s components were very widespread, further supporting an outlook of above 3.0 percent growth for the remainder of 2018.
I am not sure if Ataman means downturn when he says “possible moderation” in 2019 but we all have heard some of the predictions of a slowdown in 2020. This was a very positive report so lets try to remain upbeat…
Outlook for Housing Stuck in Neutral
From the latest Nationwide Health of Housing Markets Report:
Historically low inventories are holding back sales while pushing prices upward. Combined with rising mortgage rates, the resulting hit to housing affordability could begin to weigh on demand soon.
Moreover, the imbalance between supply and demand is causing home prices in more local markets to heat up. Price gains have accelerated in two-thirds of the country’s 400 metro areas over the past year — further challenging the search for affordable housing for homebuyers.
Nothing that we have not heard multiple times already but it bears repeating: low inventory combined with increasing prices and mortgage rates could lead to problems! If buyers cannot afford or find a home, demand will suffer…
Manufactured Home Myth Busted?
From the Urban Institute:
Manufactured housing is 35 to 47 percent cheaper per square foot than site-built housing, yet the number of manufactured homes shipped each year has decreased from averaging 242,000 a year between 1977 and 1993 to just 92,500 units in 2017.
Restrictive or unavailable financing, restrictive zoning, and the view that manufactured homes do not appreciate as much as site-built homes have limited this type of housing. A recent government report, however, reveals that manufactured homes may actually appreciate at levels similar to site-built homes.
Interesting that this report found that manufactured homes appreciate almost like site-built homes. Before you run out and buy a manufactured home, pay particular attention to the mention of “restrictive or unavailable financing”.
Home buyers can normally get financing from the mobile home dealerships. But they will find that refinancing or selling to someone that needs a mortgage can be a HUGE issue.
With the extreme need for affordable housing, I found this article very interesting. If the problems with financing manufactured homes were addressed, this could be one potential solution to the shortage of affordable homes.
The Broken Promises of the Tax Cuts
From the Economic Policy Institute:
One of the leading arguments for the GOP’s Tax Cuts and Jobs Act of 2017 has been that it will raise the wages of rank-and-file workers, with congressional Republicans and members of the Trump administration promising raises of many thousands of dollars within ten years.
Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018 to assess the trends in bonuses in absolute dollars and as a share of compensation. The bottom line is that there has been very little increase in private sector compensation or W-2 wages since the end of 2017. The $0.03 per hour (inflation-adjusted) bump in bonuses between the fourth quarter of 2018 and the second quarter of 2018 is very small and not necessarily attributable to the tax cuts rather than employer efforts to recruit workers in a continued low unemployment environment.
An examination of overall wage and compensation growth does not provide much in the way of bragging rights for tax cutters, especially given the expectation of rising wages and compensation amidst low unemployment.
Not exactly what some may want to hear or be capable of believing. But for those willing or capable of considering something that is contrary to their beliefs, this could be an eye opener…
Well that is all for today! If you enjoyed this article, please share it on Facebook, Twitter and Google!