Existing Home Sales Should Be Higher Than Expected: A Preview
The NAR is scheduled to report May existing home sales tomorrow and the consensus is expecting 5.0 million units up 0.6% from April.
Yet, according to my friend, Christophe Barraud, Chief Economist and Strategist at Market Securities and also the best forecaster of US statistics since November, existing home sales should increase sharply in May:
According to my estimate, in order for the sales in adjusted value to be stable from April to May, that is to say around 4 970 K – raw data should rise 10.3% from May 2012 to May 2013. Nevertheless, local data that I gathered show a rise of 15.0%. Indeed, even if existing home sales decreased in some regions like Las Vegas (-6.0%), they rose significantly in states like Washington (21.9%). Finally, we get a seasonally adjusted statistics of 5 180 K which represents a 4.2% rise MoM.
This forecast is coherent with articles which show strong sales in some regions:
- Baltimore (3-year high)
- Pikes Peak (6-year high)
- Houston (all time high)
- Southern California (7-year high)
- Albuquerque (6-year high)
One of the main explanation of this surge could be the rebound in inventory, the fact is that increasing home prices are giving more sellers sufficient equity to sell.
More from Redfin:
We’re back on the topic of inventory today, but with glad tidings: Inventory is finally beginning to recover! Active listings grew 6.4% between March and April and another 4.2% on top of that between April and May. Last year inventory peaked in January and fell almost all year. If the current trend keeps up, we may hit positive year-over-year inventory before the end of the year. The growth in new listings has also been explosive over the same period.