December Existing Home Sales To Rebound From Unexpected November Dip According To Auction.com Residential Real Estate Nowcast

Auction.com Model Projects December Sales of 4.95 Million Units (SAAR) and a Median Sales Price of $223,322

Jan 05, 2016, 09:00 ET from Auction.com, LLC

IRVINE AND SILICON VALLEY, Calif., Jan. 5, 2016 /PRNewswire/ -- Auction.com, LLC, the nation's leading online real estate marketplace, has released its latest Auction.com Residential Real Estate Nowcast which projects that existing home sales for the month of December will fall between seasonally adjusted annual rates of 4.8 and 5.11 million annual sales, with a targeted number of 4.95 million – up 4.1 percent from a surprisingly lackluster November.

In December, the National Association of Realtors® (NAR®) released its existing home sales data for November, reporting an 11.2 percent month-over-month decrease in home sales to 4.76 million units – even after its downward revision to 5.32 million units for October. This is the lowest level noted since April 2014 and represents a 3.8 percent year-over-year decline, the first annual decrease since September 2014. The drop-off was unexpected by both economist estimates and Auction.com, which predicted a more moderate decline for November and a range of 5.2 to 5.54 million units in its most recent nowcast.

Auction.com Chief Economist Peter Muoio cautioned against reading too much into November's surprisingly weak sales figure, pointing to the presence of several positive underlying fundamentals that typically lead to home sales: a healthy job market, wage gains, improved consumer confidence and – at least through the end of 2015 – low interest rates.

According to Muoio, "One potential cause for the November drop-off is the introduction of the CFPB's 'Know Before You Owe' mortgage initiative, which could have created processing delays and pushed closings out a month or two. If this is the case, we could end up seeing home sales bounce back from the November low by early 2016."

While new regulations may have caused a temporary slowdown, low inventory and affordability concerns represent ongoing challenges that could further restrain home sales going into 2016. "Inventory of homes for sale continues to be extraordinarily low, since a very large number of homeowners are in negative or near-negative equity positions," said Auction.com Executive Vice President Rick Sharga. "What could pose more of an issue in 2016 is the combination of potentially higher interest rates and rising home prices making homes less affordable for potential buyers."

Home prices continue to inch up following four consecutive month-over-month declines from the summertime peak. NAR recently reported a 6.3 percent year-over-year increase in median existing home prices in November to $220,300 – well within the range of $214,057 - $236,589 that Auction.com predicted last month. Findings from the Auction.com Residential Real Estate Nowcast suggest that sales prices for existing homes will fall between $212,156 and $234,488 in the month of December with a targeted price of $223,322, representing a 7.3 percent year-over-year increase.

About the Auction.com Residential Real Estate Nowcast Model

The Auction.com Residential Real Estate Nowcast combines industry data, proprietary company transactional data and Google search activity to predict market trends as they are occurring – weeks before the findings of other benchmark studies are released. Building upon the groundbreaking work by Google Chief Economist Hal Varian, Auction.com's nowcast model extends a traditional autoregressive-forecasting model to incorporate contemporaneous information that provides significantly enhanced accuracy.

Auction.com will occasionally update its nowcast as fresh data provides additional signals for current home sales activity. The Auction.com Residential Real Estate Nowcast model has proven highly accurate across 2015.

Existing Home Sales

Month

Reported Existing Home Sales

(in millions)

Auction.com Point Estimate

(SAR in millions)

Auction.com Predicted Range

(SAR in millions)

January 2015

4.82

5.01

4.83 – 5.19

February 2015

4.89

5.03

4.87 – 5.19

March 2015

5.19

5.06

4.90 - 5.22

April 2015

5.04

5.33

5.16 – 5.50

May 2015

5.32

5.31

5.14 – 5.48

June 2015

5.48

5.53

5.35 – 5.71

July 2015

5.58

5.56

5.38 – 5.74

August 2015

5.31

5.64

5.46 – 5.82

September 2015

5.55

5.40

5.23 – 5.57

October 2015

5.36

5.44

5.26 – 5.51

November 2015

4.76

5.37

5.20 – 5.54

December 2015

TBD

4.95

4.80 – 5.11

Sources: Google, NAR, Auction.com

Existing Home Sales Pricing

Month

Reported
Existing
Home Price

YoY % Change

Auction.com
Point Estimate

YoY % Change

Auction.com
Predicted Range

January 2015

$197,600

5.2%

$205,126

9.2%

$194,869 - $215,382

February 2015

$201,900

7.2%

$201,077

6.7%

$191,023 - $211,131

March 2015

$210,700

7.1%

$204,165

3.8%

$193,956 - $214,373

April 2015

$219,400

8.9%

$211,633

5.0%

$201,052 - $222,215

May 2015

$228,700

7.9%

$220,799

4.2%

$209,759 - $231,839

June 2015

$236,400

6.5%

$228,929

3.1%

$222,098 - $245,477

July 2015

$234,000

5.6%

$239,126

7.9%

$227,170 - $251,082

August 2015

$228,700

4.7%

$230,666

5.6%

$219,132 - $242,199

September 2015

$221,900

6.1%

$227,760

8.9%

$216,372 - $239,148

October 2015

$219,600

5.8%

$225,546

8.7%

$214,269 - $236,824

November 2015

$220,300

6.3%

$225,323

8.7%

$214,057 - $236,589

December 2015

TBD

TBD

$223,322

7.3%

$212,156 - $234,488

Sources: Google, NAR, Auction.com

About Auction.com:  
Auction.com, LLC, is the nation's leading online real estate marketplace. Founded in 2007, the company has sold more than $34 billion in residential and commercial real estate assets. Auction.com has over 900 employees and headquarters in Irvine and Silicon Valley, Calif., as well as offices in key markets nationwide. Visit www.auction.com for more information.

 

SOURCE Auction.com, LLC