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Home Sales Down, but Home Prices Still Inch Up


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2019 Jan 31, 6:15am   1,939 views  5 comments

by BayArea   ➕follow (1)   💰tip   ignore  

The big headline over the past few months is huge sales declines YoY.

But prices look to still be inching upward.

What is the trigger or event or sequencing that will turn sales declines into pricing declines?

https://www.cnbc.com/2019/01/30/southern-california-home-sales-plunge-20percent-in-december-lowest-pace-in-11-years.html

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1   HeadSet   2019 Jan 31, 6:47am  

What is the trigger or event or sequencing that will turn sales declines into pricing declines?

Time. Prices will lower when people realize they must sell at market price, not what they think they "need" or "deserve."
2   Heraclitusstudent   2019 Jan 31, 1:05pm  

BayArea says
What is the trigger or event or sequencing that will turn sales declines into pricing declines?


Maybe you are confusing the causality: sales go down... because prices go up.
And as the market becomes more exclusive to the rich, prices can go on increasing. Doesn't matter if the rest population is either leaving or living in the streets.

The only moderation would be from building more.
3   mell   2019 Jan 31, 3:24pm  

Heraclitusstudent says
BayArea says
What is the trigger or event or sequencing that will turn sales declines into pricing declines?


Maybe you are confusing the causality: sales go down... because prices go up.
And as the market becomes more exclusive to the rich, prices can go on increasing. Doesn't matter if the rest population is either leaving or living in the streets.

The only moderation would be from building more.


Not necessarily. Usually few sales will skew the median upwards as the rich are always willing to buy (they don't need to time the market). Overall price action has been down for regular houses.
4   GNL   2019 Jan 31, 3:29pm  

It's because few homes are being built and the ones being built are expensive.

Fewer homes being built can only end up causing fewer sales and rising prices.
5   AD   2019 Feb 24, 8:47pm  

I agree about housing inventory being down, therefore lower supply is one of the main reasons that home prices may be rising especially in certain zip codes like in California, but perhaps not in increasing-property tax states in the northeast.

New housing construction (i.e., housing starts) has slowly decreased since October 2016:

https://tradingeconomics.com/united-states/housing-starts

https://fred.stlouisfed.org/series/HOUST

While mortgage applications have declined 5% compared to 12 months ago :

https://www.cnbc.com/2019/02/13/mortgage-applications-drop-3point7percent-as-homebuyers-pull-back.html

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