April existing home sales dropped after 2 months of increases. Prices increased yet again, following a trend that has lasted more than 6 years. The pace of sales jumped, with days on the market dropping sharply. Regionally, sales either declined or were flat, however prices increased in all regions. The driving force in this market continues to be lack of inventory.
April existing home sales dropped by 2.5 percent compared to March, and were 1.4 percent lower than April 2017, according to the National Association of Realtors (NAR) April Existing Home Sales Report, released May 24th.
Inventory rose from March to April by 9.8 percent (as is typical in the spring selling season), but it was 6.3 percent lower year-over-year, and has fallen for 35 months in a row. The supply of unsold inventory was 4.0 months, down from 4.2 months a year ago.
Home prices continued to increase year-over-year. The median price of existing homes sold in April was $257,900, up 5.3 percent from April 2017 ($245,000). We’re now at 74 consecutive months of year-over-year increases.
Days on the market (DOM) dropped to 26, compared to March’s 30. A year ago, homes typically stayed on the market for 29 days, so the sales pace has increased both month-to-month and year-over-year.
According to NAR chief economist Lawrence Yun, “The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home. What is available for sale is going under contract at a rapid pace,” said Yun. “Since NAR began tracking this data in May 2011, the median days a listing was on the market was at an all-time low in April, and the share of homes sold in less than a month was at an all-time high.”
Regional sales generally declined or stayed flat. The only increase was a slight uptick year-over-year in the South. Prices rose across the board, with the West leading at 6.2 percent year-over-year. The hottest metro areas (measured by days on the market/listing views per property) continued to be dominated by California, with 5 metros in the top ten, but there were 2 non-California metros at the top, led by Midland, TX at #1 and Boston-Cambridge-Newton, MA at #2. Columbus, OH, Colorado Springs, CO, and Ann Arbor, MI filled the #4, #6, and #9 spots on the list.
I’ve said it before: Don’t wait until you find a home to look for financing. This low inventory market means you’ll almost certainly be competing against multiple offers, and things will move quickly. The strongest offer will win, and that offer will have a solid financial component. Meet with a First Choice Loan Services Inc. Loan Originator now for a pre-underwriting approval or preapproval. You’ll know how much loan you may qualify for and you can review loan programs to find the one that best suits your financial needs and goals. Make sure your offer includes a First Choice Priority Buyer Letter!
Timothy M. Sheahan, Jr.
Executive Vice President | Secondary Marketing