Amid Collapsed Demand for Existing Homes, New Listings Come out of the Woodwork
Housing market is frozen, people have gone on buyers’ strike, and sellers are hoping that this too shall pass.
The median price of existing single-family houses, condos, and co-ops in the US whose sales closed in December dropped to $382,600, down by 7.5% from the peak in June 2022, according to data from the National Association of Realtors (NAR) today.
This puts 2023 on record as the first year since the Housing Bust when the seasonal high in June was below the seasonal high (and all-time high) a year earlier. Given the price surge in the spring 2023, the median price was 4.4% higher than in December a year ago.
In another unusual development, prices have dropped every month since June – it’s unusual because seasonally, before the pandemic, there were upticks and flat spots in October through December periods, the little hooks in the chart (circled). There were no such upticks or flat spots in 2022 and 2023, prices fell right through that October-December period (historic data via YCharts):
Demand for existing homes has collapsed.
The seasonally adjusted annual rate of sales of existing homes fell to 3.78 million in December, the lowest since the worst two months of the Housing Bust in 2010. For the whole year, sales fell to 4.09 million, the worst year in the NAR’s data that goes back to 1995.
Sales compared to prior Decembers (historic data via YCharts):
- From 2022: -6.2%.
- From 2021: -37.9%
- From 2020: -43.2%
- From 2019: -31.6%.
- From 2018: -24.4%.
Actual sales – not the seasonally adjusted annual rate – fell to 297,000 homes, down by 42% from December 2021.
Seasonally, January and February mark the low months of the year in terms of closed sales. Sales that closed in those two months reflect the lull in deals over the holidays. June is usually when closed sales peak, reflecting deals made during the end of “spring selling season” in April and May. During the second half of the year closed sales declined (data via NAR):
Months’ supply, at 3.2 months, was the highest for any December since 2018 (when a surge in mortgage rates due to Fed rate hikes slowed the housing market). And it matched 2017. Months’ supply is the result of sales that collapsed while sellers were still trying to outwait this situation (historic data via YCharts)…..
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