US Existing Home Sales Decline -2.7% In March As Available Inventory Remains MIA (Median Price YoY At 15.23% YoY As Fed Keeps Foot On Monetary Accelerator)

Confounded Interest ^ | 04/20/2022 | Anthony B. Sanders

[Browns Ultra Fan]

US existing home sales declined -2.7% MoM in March and are down -3.8% YoY.

The median price of existing home sales are still sizzling at 15.23% YoY while inventory available still remains MIA by historic standards.

While mortgage rates have been smoking, existing home sales growth slowed compared to February as the US begins its Spring/Summer buying season.

WHO is buying homes? There are considerably purchases by investors as of Q4 2021 taking advantage of Fed stimulypto.

[Browns Ultra Fan]

Inflation is transitory, huh Jan Psaki?

[Flick Lives]

The median price of existing home sales are still sizzling at 15.23% YoY

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Even if you got a 15% raise, which is not likely, one’s salary going up by 15% is not going to keep up dollar-wise with the price of housing going up by 15%. That large price on a home is going to result in a net dollar increase far above the dollar increase in wages.

Many decades ago, it was considered appropriate to spend about 25% of one’s gross income on housing. Now I’ve heard of banks qualifying people for a mortgage where the percentage spent on housing is approaching 50% of income.

[EEGator]

I have no clue, but I wonder how many homes are currently not occupied and held by large investment companies.
Any clue?

[riri]

A house in my neighborhood just went up for over a million dollars.

I wish I could convey how insane that is. No driveway to speak of. Tiny lots. Nothing special.

[Fido969]

Sales down 2 or 3 percent?

Good Lord, the things people cling to and try to pass off as panic porn.

[cgbg]

I saw a number for Black Rock of 80,000 homes in their portfolio—don’t know how many are rented and how many are vacant.

That is not a large number, but in selected “hot” markets it can significantly affect prices at the margin—even a 5% drop in available inventory has an outsized effect.

[Clemenza]

Good news is Americans don’t move around as much as they did even 40 years ago. Americans are also not reproducing themselves as much as they were as recently as 20 years ago. I live in one of those parts of the country where single family homes are a premium as the area was built out after WWII.

As for investors buying up homes, it’s their risk and will be their loss if the market crashes. Buy at the sound of cannons, sell at the signing of the peace treaty.

[Zathras]

Yea its pretty crazy in Phoenix right now.

[EEGator]

BlackRock or Blackstone?

I know there are numerous other investment firms into real estate in a heavy way.

I’ll see if I can put together numbers. It won’t state anything about occupied or not though...

[Georgia Girl 2]

Inventory is low so that affects purchases. People will not stop buying they will just switch to ARMs.

[woodbutcher1963]

The big difference is the Blackrock, Fundrise, Crowdstrike and other real estate investment funds are locking out the smaller real estate investor in many US markets.

If I try to buy a multi family house with the intention of renting it out I have to put down 25% minimum. Then the interest rate on the low is higher than an owner occupied mortgage. These investment companies come in with all cash offers. $550,000 for a three apartment house, no problem, they will take four of them. In many areas they are also buying single family houses just to rent out.

[Go Gordon]

I have no clue, but I wonder how many homes are currently not occupied and held by large investment companies. Any clue?

There is a new development going up in North Port Florida. The overall development is divided into four large sections with each section having its own builder. One section was 100% town homes. One person came in, before construction was completed, and bought every single unit. Since then, the prices of the homes have gone up from "Mid-$200s" to $400k. I'd say the guy that bought the townhomes will make a nice a buck when he gets to sell them.

[Mariner]

“I have no clue, but I wonder how many homes are currently not occupied and held by large investment companies.”

When the Fed/Banks were giving away money at 2.0 - 2.5%, a REIT would be negligent to not borrow as much as the banks would let them have, and buy everything for sale.

That was but a year ago.

[EEGator]

So how much would you guess is unoccupied?

[Roadrunner383]

Wife and I called on two houses down in an area that is red hot as far as home sales. We have our home paid off and willing to add cash if needed, so we are not financing.

We were told by the two agents that sellers are not accepting any contingencies. We need to come with cash in the bank and have bank statements to prove it, all other offers rejected. The agents advised selling our house first and moving into a rental or with relatives, which means moving twice.

One of the agents we talked to said he had 23 offers over the weekend and the other agent said 18 during the middle of the week (hadn’t even gotten to the weekend).

[VeniVidiVici]

We were told by the two agents that sellers are not accepting any contingencies. We need to come with cash in the bank and have bank statements to prove it, all other offers rejected.

Yup. I think we will do the same when putting ours on the market in June.