March data has been rough. Housing Starts were down almost 9% month over month in March and the February 18.7% blow out gain for Starts was revised down to 11.7% month over month. Building Permits were also down in March, by almost 2% and the unexpected February gain was revised down to a 0.7% decline. Most concerning were single-family starts which were down 10% year over year and a staggering 17% month over month. This is the biggest drop in almost four years. Adding to the gut punch, single-family permits were also down. Three of four regions posted declines and our home region the West saw the steepest drop in a decade.
Given this data, it was no shocker when the Case-Shiller’s 20-City Composite, which is a lagging indicator, had its weakest annual growth since a September 2012 at 3.58% year over year. Looking at January year over year numbers for the Denver metro area, we were growing below the national average at 2.89%. Luckily, all 20 cities in the index still showed gains, but the cities that were big gainers of the previous five years, which Denver is among, were very weak, which is a bad omen for future price growth, but a great sign for the bubble to burst. The weakest gains were in San Diego at only 1.3% and San Francisco at 1.8% down from 10.2%a year earlier.
We are eagerly awaiting the DMAR release of the March 2019 sales numbers to get our first sneak peek at what is usually a busy spring season. We are laser focused on the amount of inventory available for sales, which will have the biggest impact of prices. Inventory has been rising year over year at double-digit clips for the several months now.
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