The seasonally adjusted annual pace of new single-family home sales in the U.S. dropped to 414,000 in December, down 7.0 percent from 445,000 in November but 4.5 percent above the December 2012 pace of 396,000 and the strongest December since 2007 when the pace measured 619,000. The December pace peaked at 1,242,000 in 2004.
An estimated 428,000 new homes sold in 2013 versus 368,000 in 2012, up 16.4 percent.
Down 2.8 percent from November to December, the inventory of new single-family homes for sale in the U.S. is currently up 14 percent year-over-year.
I feel we’re slowly coming back to a normal situation. And apart from some local markets, there’s no bubble forming. This means less irrational exuberance to get into the market at all cost and what affects the supply/demand balance is incomes vs prices & rates.
Of course SF and other expensive markets are a bit different…
I feel we are still in a very liquid market here since I sold a house yesterday in an auction with a roomful of hungry buyers outbidding each other until the last seconds. We ended up selling it 10% over asking and the winning bidders were nearly in tears having finally gotten a great place to live after months of trying.
So, that’s the view from the ground.
The market for homes / condos in SF is still very hot but certainly more tame over the last 12 months. It wouldn’t take much to hurt the market and take the wind out of it quite a bit. Still a good time to be a seller and buyers have less to choose from in inventory as the chart above states quite clearly.
People are not choosing to sell or move; they are staying. Few (ie: none) people in the circle I run in are thinking of cashing out or moving for economic reasons. I know one family that chose to move out and rent until the market cools. I think they will be renting a while but at some point something will happen and dent the market. It always does.
I still think we move sideways for quite a while…
Jimmy,
From the ground, in your local market. These numbers are national.
The BA is different, especially SF and the SV.
Nationally, we’re obeying to normal forces.
I am in NV now before going to FR for my current ventures. Inventory is going up in LV big time, and the main reason is financing. Many formerly underwater owners are putting their property on the market with unrealistic prices. That’s the “view from the ground” in another market.
” Few (ie: none) people in the circle I run in are thinking of cashing out or moving for economic reasons. ”
There’s been a nationwide large persistent trend of people moving less frequently. Something only accentuated by tougher economic times.
http://www.bloomberg.com/news/2013-05-21/as-job-flow-slows-americans-get-stuck-in-place.html
Hard to say what’s the cause and what’s the effect. Are people moving less because of issues with the housing market or are fewer homes going up for sale because fewer people want to move.
anon2, if your circle is in SF, then it would make sense for people to stay put, because 1) unemployment in SF is under 5% and current wages are very decent, therefore no real reason to move for a job opportunity – 2) you can cash out but once you do can you ever come back? and 3) It’s still one of the best places to live for a certain type of lifestyle. Not for everyone of course, but I meet former SF-ers with “mover remorse” either in LA or LV. I am not going to sell my SF pad for this precise reason.
Unloading a bad asset purchase at the first break-even opportunity is classic behavior in any recovery.
If you overpay for an asset and then take a huge paper loss, it’s natural to cut off your gains once the asset recovers enough so that you can “finally” break-even. People are emotional creatures and they get tired of dealing with a stressful, money-losing situation.
Regarding moving up, anecdotally a number of people I know know who bought a “starter” home on the Peninsula have given up on the idea of moving up and have added on. There is something still very different with the market with no supply and excessive bidding on the few available homes. Most I know feel they couldn’t keep up or compete so it is better to stay put and use the one leverage they have which is knowing a lot of people in the trades.
Since I am looking for my family for our first home it is an awful experience.
In the Miami area, we are experiencing similar issues with sales. A combination of low inventory and high prices has begun to slow the number of sales in our market. Interesting to see how the year begins to shape out after a record breaking 2013.
@Jimmy – Your auction sounds great! Where did you hold it? How did your roomful of buyers find out about the event?
I also see no reason to sell and stay around in sf, the best you can do is a lateral move and renting seems a bit unstable as of late with ellis evictions etc. Leaving sf is going back to strip malls and car culture with no center to anything.
“Leaving sf is going back to strip malls and car culture with no center to anything.”
Boy, you really should get out and about and travel a little! There are dozens of really great cities in the U.S. (not to mention the rest of the world) that have a “center” and “culture” and lack strip malls. I like SF, but it’s hardly the only place to live with a bit of character and soul.
sfwalker,
Very true about the lateral move. I am at the first few months of such a move in LV, NV, and it is quite a cultural adjustment… But I am enjoying it so far. A steady SF cash stream makes you at the top of the food chain in here where the average person lives month-to-month and these past 7 years have been very painful.
True story: yesterday someone asked me how people could use their swimming pools in San Francisco with the chilly weather. Priceless.
sfwalker. SF is pretty car centric too, although you can get around without one. Cars are not going anywhere. the politicians here are building bike lanes and not subways. without realt transit, cars will rule the day
moto – I don’t mind cars, have one myself. I just like to live in a place where as you said, you can get around without one. That statement doesn’t apply in like 99% of the US, where you simply have to have a car to survive. Not so in SF, where I only drive if I want to.