Lawler: Early Read on Existing Home Sales in July

From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.85 million in July, up 23.9% from June’s preliminary pace and up 8.5% from last July’s seasonally adjusted pace.

Local realtor/MLS data suggest that the median US existing single-family home sales price last month was up by about 8.4% from last July, a sharp YOY acceleration from June.

While not all realtor reports include data on new pending sales – and some that do often revise those data significantly – the limited data available suggest that the YOY increase in pending sales again exceeded the YOY gain in closed sales last month.

Projecting the NAR’s inventory estimate for July is tricky. Local realtor/MLS reports suggest that the “inventory” of homes for sale last month was down by about 30% nationwide in July. However, those same local reports for June would have suggested a much sharply YOY drop in inventories than the NAR reported.

Most of these local realtor/MLS reports utilize third-party software, and most exclude all pending contracts from the inventory number. These reports also differ from the reports sent to the NAR, and it is my understanding is that not all local realtors/MLS exclude all pending contracts from the inventory number in the NAR report.

The data do suggest, however, that the YOY decline in inventories in July was larger than it was in June.

Here are a few more observations: First, for local realtor/MLS reports which break sales out by type, single-family detached home sales continued to show stronger growth than condo/coop sales, and inventories of SFD homes were down MUCH more sharply YOY than condo/coop inventories (in fact, in some reports SFD inventories were down sharply while condo/coop sales were up a bit.

Second, home sales in counties with beach resorts were up extremely sharply from a year ago, at least on the East Coast.

Finally, I have heard anecdotally that “many” urban dwellers have been buying SFD homes in the suburbs without (at least yet) listing their urban property.

CR Note: The National Association of Realtors (NAR) is scheduled to release July existing home sales on Friday, August 21, 2020 at 10:00 AM ET. The consensus is for 5.39 million SAAR.