Home sales drop, investors pull back, prices fall 8.4% in 4 months, active listings and price cuts increase further

Sellers are struggling with denial: Priced “right,” a house will sell, but “right” is where the buyers are, and they are few and far between.

By wolf richter For wolf street,

Sales of all types of previously owned homes – homes, condos and co-ops – fell 5.9% in September to October, the ninth month in a row, at a seasonally adjusted annual rate of 4.43 million home sales, just April 2020 A hair over the lockdown-month of, according For the National Association of Realtors. Sales were down 34% compared to the recent free-money peak in October 2020.

Year-over-year, sales declined 28%, the 15th month in a row of year-over-year declines. After April and May 2020, this was the lowest rate of sales since December 2011 (historical data YCharts,

sales of single family homes Homes fell at a seasonally-adjusted annual rate of 3.95 million homes, down 6.4% in September to October and 28% year-on-year.

Sales of condos and co-ops Jobs fell 2.0% in September to October and 30% year-over-year to a seasonally-adjusted annual rate of 480,000.

investor or second home buyer 16% of homes bought in October, down from the 17%-22% range in the spring and winter. In other words, their purchases fell at an even greater rate than regular buyers, as investors are also losing interest in buying at these prices.

This decline in sales is an indication that potential sellers and buyers are at loggerheads. Many potential sellers refuse to accept reality and sell their prices where they are; Instead, they’re thinking, “and this too shall pass,” and they’re hoping or praying for a Fed pivot or for a miracle or whatever and don’t put their house on the market, or put it on the market. Remove from the market after not getting any traffic at their aspirational price. And buyers have lost interest at current prices.

Homes that are priced right – meaning they are priced low where there are buyers – are selling. But the vendors don’t like to go there. And we see it in active listings as well. But some of the price cuts are taking place, as more sellers are finding out.

cut prices: In October, the number of homes listed with price reductions increased to 327,184 homes, the most since October 2019, and only slightly below (via data) realtor.com,

But the proportion of active listings with price reductions has exceeded 40% for the past five months, the highest in data provided by realtor.com that goes back to 2016:

Average price Home sales of all types closed in October, declining for the fourth month in a row, and are now down 8.4% from their June highs.

This further reduced year-over-year gains to 6.6%, down from 8.0% in September, and down year-over-year gains in the 20% to 25% range at peak mania, indicating That seasonality only accounted for a portion of the price decline, and that some sellers are being more realistic in the rest of the price decline (historical data via YCharts):

active listing Homes for sale (total inventory for sale less pending unsold properties) increased to 754,000 homes in October, up 33% from a year ago, and the most since August 2020. They’ve remained relatively short, another sign that potential sellers are still hoping for a Fed pivot or miracle and don’t put their vacant home on the market or take it off the market after a while (via Data realtor.com,

Days supply of total inventory increased to 3.3 months of sales, the highest since June 2020.

sales by region:Sales fell in all regions, but fell the most in the West:

  • Northeast: -6.6% Mom; -23.0% YoY.
  • Midwest: -5.3% Mom; -25.5% YoY.
  • South: -4.8% Mom; -27.2% YoY.
  • West: -9.1% MOM; -37.5% YoY.

Since mortgage rates jumped to a normal-ish range Pre-Money-Printing Era:

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