Carpe Diem

More reports of strong home sales in October all over the country, this is what a recovery looks like

1. Houston home sales skyrocketed by 35.1% in October compared to last year, and posted the 17th consecutive month of positive sales on a year-over-year basis.  The single-family median sales price increased 8.7% to $163,000 and the average price increased 8.3% to $223,366, the highest average home price in history for an October in Houston. Total sales volume in October was 47.2% higher than a year ago.

The inventory of Houston homes for sale fell to a 4.4-month supply at the current sales pace, a level last seen in December 2001. Pending sales at the end of October were 24.6% higher than a year ago, and signals further gains in home sales when November home sales data are reported.

2. Austin home sales soared by 37% in October, the highest year-over-year percentage gain in three years, while the median sales price increased by 5%. Inventory of Austin homes for sale fell to a decade-low 3.4-month supply. Local realtors report that multiple offers are becoming increasingly common.

3. San Antonio home sales increased 19% in October, while the average home price increased 7% and the median home price increased 4%.

4. Wisconsin home sales were up by 29.4% in October, and the median sales price increased by 3.5%.

5. Chicago area home sales increased by 44.1% last month on a year-over-year basis to the highest level for the month of October since 2006.  The median sales price increased by 8%.

6. Home sales in Maine increased last month by nearly 25% from October 2011, while the median sales price rose by 3.3%.

7. Minnesota home sales increased 8% in October and the median sales price increased 9.4%.

MP: We can see all of the essential elements of a housing recovery in markets like Houston and Austin: Rising home sales on a year-over-year basis for more than a year, rising sales volume, increasing median and average home prices, faster marketing time, multiple offers and falling inventory. In other words, that’s what a housing recovery looks like, and we’re seeing signs of that kind of housing recovery in metro areas all over the country.

Note that many of the metro areas and states reported here – Houston, San Antonio, Austin, Wisconsin (including Milwaukee) and Maine are not included in the Case-Shiller Home Price Index, which many look to exclusively for signs of a housing rebound reflected narrowly in only one metric – price.  A more comprehensive view of housing market activity looks to other measures besides price, like the ones mentioned above, which are all clearly showing signs of a housing recovery.  Also, the Case-Shiller is a three-month moving average with a two-month lag, so some of the gains in October home prices for the 20 metro areas that are included in that index, won’t even be reported until January or  February of next year.

9 thoughts on “More reports of strong home sales in October all over the country, this is what a recovery looks like

  1. For markets like Houston with increases in home sales by 35%, a record high average home price for the month of October, a 47.2% increase in housing sales volume, inventory at an 11-year low, pending sales up by 24.6% and rising sales-to-list price ratios, I’m sure there are other non-obvious reasons that would explain why the Houston housing market is actually depressed, and NOT recovering: faulty CPI measurements due to a government conspiracy, industry conspiracy to report faulty housing data, a change in the mix of homes sold that distorts the median/average home price, and various other reasons that support the notion that the U.S. housing market will never recover, and all good housing news can somehow be distorted through conspiracy theories and contorted mental gyrations to produce only bad news about the U.S. housing market.

    Nitwitery to follow below:

  2. Well, let be the first.

    A better headline would be ‘The money supply is inflated by trillions of dollars. The housing bubble starts to reinflate.’

  3. TX; I’m not surprised. I live in CA and I hear a lot of people talking about TX as the last Eldorado. I will seriously take TX in consideration when my daughter finishes high school in two years. Now with 3.5% down and 3.5% fixed over 30 years yes you can afford a house. But it’s a trader’s market because one day inflation will come, your expenses will rise and interest rates will rise, reducing the value of the home.

  4. Who is buying all the houses? Not many regular folks who are making it their principle residence. How about investors? Who are these investors…are they Mom-and-Pop investors or large block investors (hedge-funds, private equity, etc.)? The housing recovery is in the details and you might want take a closer look at this so-called recovery.

  5. Another analogy: If auto sales were going up even though prices remained more or less constant or were increasingly only slowly, that would be a genuine auto recovery.

    • That’s a good point. All we look at for car sales is the number of units sold, without regard to price. When units sold increase, it’s a good sign. Likewise with houses.

      Think of the housing market from the viewpoint of a real estate – all I really care about is housing sales volume, since that’s what my commissions are based on. In that case, I’m pretty happy right now. Housing sales volume is up by 47% compared to last year, homes are selling much faster, there are multiple offers, and I’m making tons of money compared to last year. And in Houston (not in Case Shiller), home prices were the highest ever for the month of October.

      So what part of that story suggests that the market is not booming and in recovery?

  6. And BTW, here’s the failure of your analogy: One does not buy a stock market. One *does* buy individual stocks, but a stock is a non-physical item whose *only* feature is its price. Houses and cars, on the other hand, *are* physical items which one buys one at a time, of which price is just one of many features. Thus one can count purchases of physical items, and if those purchases are rising, there is a recovery.

    • “Welcome to another fail, the one about ignoring that housing is usually considered an investment “

      Wrong-o, bud. Most people buy a house to *live* in it. It is a physical item which gets *used* just like a car. Any appreciation in price is mere icing on the cake – but the same is true of cars. Many people buy their car with consideration of its eventual trade-in value, but that does not mean a car is an investment.

  7. According to this logic, there would be no auto recovery if everyone were paying 100% cash down on their cars instead of taking out loans, even while car sales were going up.

    LOL! Try again!

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