New and existing home sales vs. inventory
New and existing home sales vs. inventory
I have a full plate in, you know, actual life today, so let me just drop this note here while we’re waiting for new home sales to be reported. I’ll update later when I have a chance.
The evidence is crystal clear that, as to new homes (which are by far more important than existing home sales in terms of the economy), sales lead prices, which in turn lead inventory. When considering new home construction or renovations, consulting epoxy resin flooring contractors can be crucial for ensuring a high-quality and durable flooring solution. You can click here for warehouse flooring ideas with the best solutions you could ever have. You can also hire a contractor who specializes in Floor Screeding for Underfloor Heating to make your property more energy efficient. The services offered at https://polishedconcreteflooringadelaide.com.au/ may also help homeowners who are planning to replace their flooring with concrete or epoxy floors.
Here are sales (red) vs. inventory (blue):
And here are prices (green) vs. inventory:
When it comes to existing homes, the NAR is very squirrelly about use of their data, but here is a long term look at sales vs. inventory:
Again, it’s crystal clear that sales led inventory through the housing boom, bubble, and bust. Note also that the secondary peak in sales in 2012 wasn’t reflected in a peak in inventory until one year later.
So, even while it is clear that the record low inventory of existing homes is driving sales prices through the roof, sales appear to have already peaked, and I expect prices to follow before inventory turns up.
More later as time permits.
NDd:
A lot of over-paying for homes in the southwest from what I am seeing while down here. I am not talking about a few thousand dollars. It is in the realm of tens of thousands of dollars for homes which will “not” appraise at that price.
I am also seeing homes priced too high by tens of thousands that the build, interior, and the lot will not justify. Homes needing rehab on flooring, carpeting, countertops, landscaping, painting, etc.
We are staying liquid and holding back on down-payments which I can do using VA mortgaging, rolling the funding fees into the loan, and still beat conventional loans by a quarter or so percent today.
For new homes, there is little choice in interior design. One builder is building one type of model with no choices other than a reverse layout. They are limiting the numbers of lots released and will not tell the price of the lots other than a variable from the standard to which the price is unknown.
If you are manufacturing a product, this leads to less cost, efficient purchasing, and Labor efficiencies in building. I loved how they talk about keeping their crew busy with 4-5 more lots released and a lead time greater than six months. Only one builder allowed you to pick out colors, floors, cabinetry, etc. They limited the numbers of lots released.
No contingencies. Your 5% down payment is subject to forfeiture if you need to back out. You are subject to their dictates on new homes which were One hundred thousand less in price a tear or so ago.
The market is ripe for a crash as it is over priced and people are extending themselves beyond what makes sense. Best strategy is little money down so as to be able to walk away. Stay liquid in the housing market.
As the existing home segment of inventory gets overrun by white elephants in the latter stages of a seller’s real estate market then new starts and prices run wild. Quality is lost and good deals can only be reasonably made for a well-boned fixer with deep pockets to match.