So, yesterday we heard that in October the housing market was “catching its breath” and today we see this: New U.S. home sales leap 25% in October. How do you put those confusing headlines about real estate together?
Fairly easily, it turns out. Today’s news is about the volume of new home sales. Yesterday’s news was about the price of resale homes.
Today’s news from the U.S. Census Bureau and the Department of Housing and Urban Development reports that October closed sales of new homes were up 25% from September (a month-to-month gain) and 15% from October 2012. Demand is outstripping supply according to the charts, but part of what drove sales was a decline in prices. The median price of new homes fell 4.5% from September to $245,800 in October. That’s the lowest level since November 2012 and 0.6% below the same month of 2012. Now for another puzzle: Were those lower prices a result of builders reducing prices as we move into winter? Or, because employment numbers improved so that people in the lower price brackets could afford the lower-priced homes that haven’t been moving so well? No answer to that one, but prices still aren’t low; the median sales price of new houses sold in October 2013 was $245,800; the average sales price was $321,700.
Yesterday’s news was from the market research firm CoreLogic. This news addressed the rate of home price appreciation, which CoreLogic pegged at just over 12% nationally for the month of October. That rate of appreciate, CoreLogic projects, is a “leveling off” of the rather sharp price increases we’ve seen in the last few months. That’s consistent with my forecast for Flagstaff home prices.