Experts have been forecasting a decline with December existing home sales which are projected to be down month over month by 1.5%. Existing home sales rebounding in October and November going against the grain of declining new and pending home sales. Therefore, it makes sense that some weakness was to be expected in the December number. Except no one was prepared for the tremendous bad beat that occurred this morning. December existing home sales did indeed fall, down a staggering 6.4% month over month.
Here is the recap by region. December existing-home sales in the Northeast decreased 6.8% to an annual rate of 690,000, 6.8% below a year ago. The median price in the Northeast was $283,400, up 8.2% from December 2017.
In the Midwest, existing-home sales fell 11.2% from last month to an annual rate of 1.19 million in December, down 10.5% overall from a year ago. The median price in the Midwest was $191,300, unchanged from last year.
Existing-home sales in the South dropped 5.4% to an annual rate of 2.09 million in December, down 8.7% from last year. The median price in the South was $224,300, up 2.5% from a year ago.
Existing-home sales in the West, our home region, dipped 1.9% to an annual rate of 1.02 million in December, down a massive 15% from a year ago. The median price, on the other hand, was $374,400, up 0.2% from December 2017.
The December numbers brought the 2018 tally to 5.34 million, the weakest pace since 2015. This is the largest annual drop in existing home sales in 8 years.
Our industry cheerleader, Larry Yun, is expecting strength going into the important spring selling season, saying, “The housing market is obviously very sensitive to mortgage rates. Softer sales in December reflected consumer search processes and contract signing activity in previous months when mortgage rates were higher than today. Now, with mortgage rates lower, some revival in home sales is expected going into spring.”
We are predicting softness in the spring season because home prices have not adjusted to increase buyers’ affordability. We also predicted that Larry Yun will still have a job no matter how right or wrong his predictions are and we predict will still be attacked by the real estate industrial complex at the Denver Post for only telling the truth.
Image source: Zero Hedge