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US Existing Home Sales Should Be Slightly Below Expectations in September

The NAR is scheduled to report September existing home sales on Monday and the Bloomberg consensus is expecting 5.30 million units down 3.3% from August.

 

Yet, according to my friend, Christophe Barraud, Chief Economist and Strategist at Market Securities and also the best forecaster of US statistics since November 2012, existing home sales should fall significantly in September:

 

According to my estimate, in order for the sales in adjusted value to be stable from August to September, that is to stay at 5 480K – raw data should rise 17.5% from September 2012 to September 2013. Nevertheless, local data that I gathered show a rise of 12.6%. Indeed, even if existing home rose in some regions like in North Texas (22.4%), they fell in some areas like in Arizona (-6.6%) or Las Vegas (-1.2%). Finally, we get a seasonally adjusted statistics of 5 250 K which represents a 4.2% drop MoM.

 

This forecast is coherent with articles which show that, in several regions, sales YoY were far below the +17.5% threshold needed to stabilize sales in September:
 
- Albuquerque (+7.9% YoY)
 
- Twin Cities (+14.5% YoY)
 
- California (+5.9% YoY)
 

Existing Home Sales will be Higher than Expected in July

The NAR is scheduled to report July existing home sales tomorrow and the Bloomberg consensus is expecting 5.15 million units up 1.4% from June.

 

Yet, according to my friend, Christophe Barraud, Chief Economist and Strategist at Market Securities and also the best forecaster of US statistics since November 2012, existing home sales should rise sharply in July:

 

According to my estimate, in order for the sales in adjusted value to be stable from June to July, that is to say around 5 080 K – raw data should rise 16.2% from July 2012 to July 2013. Nevertheless, local data that I gathered show a rise of 20.8%. Indeed, even if existing home rose slightly in some regions like Las Vegas (1.2%), they increased significantly in some areas such as North Texas (28.0%). Finally, we get a seasonally adjusted statistics of 5 280 K which represents a 3.9% rise MoM.
 
This rebound in existing home sales was due to several factors:
1/ Inventories’ rebound: With the significant increase in prices, more and more households are no longer in a situation of “negative equity” and now want to sell their property.
2/ The recent rise in mortgage rates led buyers enjoying a rate-lock period of the borrowing rate to exercise their options.

 

This forecast is coherent with articles which show that sales rose YoY in some regions and therefore were far above the +16.2% threshold needed to stabilize sales in July:
 
- Clark County (+39.3% YoY)
 
- California (+21.8% YoY – the highest figure for a July since 2005)
 
- South Carolina (+23.6% YoY)
 
- Triangle (+34.3% YoY)

US Existing Home Sales Will be Below Estimates

The NAR is scheduled to report June existing home sales tomorrow and the Bloomberg consensus is expecting 5.25 million units up 1.4% from May.

 

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 fall sharply in June:

 

According to my estimate, in order for the sales in adjusted value to be stable from May to June, that is to say around 5 180 K – raw data should rise 12.7% from June 2012 to June 2013. Nevertheless, local data that I gathered show a rise of 8.8%. Indeed, even if existing home sales increased in some states like Washington (17.8%), they decreased significantly in some regions like Arizona (-10.8%). Finally, we get a seasonally adjusted statistics of 5 000 K which represents a 3.5% drop MoM.

 

This forecast is coherent with articles which show that sales fell YoY in some regions and therefore were far below the +12.7% threshold needed to stabilize sales in June:
 
- Iowa (-7.3% YoY)
 
- Rochester Area (-4.1% YoY)
 
- Bay Area (-6.0% YoY – lowest since August 2007)
 
- Las Vegas (-7.8% YoY)
 
- Orlando (-1.9% YoY)
 
I believe that this weak figures could be explained by two main factors:
 
1/ In May, sales were boosted by a milder climate which helped to compensate the difficult conditions recorded since the beginning of the year. So, in June, sales could return to the normal pace around 5.00 million.
 
2/ The recent tensions in mortgage rate pushed transactions higher (more sellers and buyers) in May but the continuing rise (+67 bp in May, +29 bp in June) weighted on buyers.

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.