Despite An Unexpected Slowdown In April, Existing Home Sales Will Pick Up In May, According To Auction.com Real Estate Nowcast

Auction.com Model Projects May Sales to Come in at 5.18 Million Units (SAAR), and Median Sales Price at $220,799

May 21, 2015, 18:07 ET from Auction.com, LLC

IRVINE, Calif. and SILICON VALLEY, Calif., May 21, 2015 /PRNewswire/ -- Auction.com, LLC, the nation's leading online real estate marketplace, has released its May Auction.com Real Estate Nowcast which projects that existing home sales for the month of May will fall between seasonally adjusted annual rates of 5.03 and 5.34 million annual sales, with a targeted number of 5.18 million – up 2.9 percent from April and 5.8 percent from a year ago.

"Heading into the summer buying season, we're expecting to see healthy increases in home sales activity – though those increases will likely occur at a more modest pace," said Auction.com Executive Vice President Rick Sharga. "While the jump we saw in March somewhat made up for lackluster performance in January and February, tight inventories, strict lending standards and diminished participation by investors remain significant obstacles for the market."

Sharga also noted that the volatility seen over the past six months is a reminder for economists, investors and real estate professionals to keep monthly performance data in perspective. "It's important to keep blips like the one we saw in March in context. We're in an unusually volatile period in the housing market, with almost unprecedented swings in sales volumes from month to month. The bottom line is that in a truly healthy housing market, we'd already be on pace for 6 million existing home sales, but at this rate, I expect that the market will stay in the 5 million range for at least the remainder of the year."

Earlier today, the National Association of Realtors® (NAR®) released its existing home sales data for April, reporting that home sales were at 5.04 million units – a 3.3 percent decrease from the March pop in sales, though still up 6.1 percent from a year ago. The monthly decrease was unexpected by both Auction.com and Consensus estimates, both having predicted an April increase based on the market's strong performance in March.

NAR also reported an April pop in existing home prices to $221,230 – within the range of $201,052 and $222,215 that Auction.com predicted last month and indicating an 8.9 percent increase compared to a year ago. This marks a new cyclical peak for home prices, which are now just 2.6 percent below their pre-bust level.

Findings from the Auction.com Real Estate Nowcast suggest that sales prices for existing homes will fall between $209,759 and $231,839 during the month of May, with a targeted price of $220,799. This represents a 4.2 percent year-over-year increase for the month.

"In our estimation, this burgeoning home price strength should help to boost sales out of their range, as a key constraint to sales at this time is the low level of inventory for sale," said Auction.com Chief Economist Peter Muoio. "Higher prices should entice more sellers into the market."

But, stronger owner-occupier demand is also needed to offset current subdued investor purchasing activity.  "The good news on that household formations have been following a much better path recently, following the Census Bureau's massive revisions released last summer," he said. "The improving economy should generate continued healthy household formations and therefore stronger demand for homes down the road."

About the Auction.com Real Estate Nowcast Model

The Auction.com 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 Real Estate Nowcast model has proven highly accurate over the course of 2014 and into 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 2014

4.62

4.91

4.72 – 5.11

February 2014

4.60

4.72

4.54 – 4.91

March 2014

4.70

4.64

4.49 – 4.80

April 2014

4.75

4.78

4.62 – 4.94

May 2014

4.90

4.81

4.65 – 4.97

June 2014

5.01

5.05

4.94 – 5.17

July 2014

5.07

5.11

4.99 – 5.22

August 2014

5.00

5.19

5.09 – 5.30

September 2014

5.10

5.08

4.91 – 5.24

October 2014

5.16

5.13

4.96 – 5.3

November 2014

4.95

5.16

4.99 – 5.33

December 2014

5.07

5.03

4.85 – 5.21

January 2015

4.82

5.01

4.83 – 5.19

February 2015

4.89

5.03

4.87 – 5.19

March 2015

5.21

5.06

4.90 - 5.22

April 2015

5.04

5.33

5.16 – 5.5

May 2015

TBD

5.18

5.03 – 5.34

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 2014

$187,900

10.1%

$194,662

9.2%

$184,841 - $204,772

February 2014

$188,400

8.8%

$189,743

8.8%

$180,469 - $199,308

March 2014

$196,700

6.9%

$190,991

3.8%

$181,441 - $200,540

April 2014

$201,500

5.1%

$196,815

2.6%

$186,974 - $206,656

May 2014

$212,000

4.4%

$202,179

-0.5%

$192,070 - $212,287

June 2014

$222,000

3.7%

$211,753

-1.0%

$201,166 - $222,341

July 2014

$221,600

4.3%

$219,381

3.3%

$208,412 - $230,350

August 2014

$218,400

4.1%

$219,148

4.5%

$208,190 - $230,105

September 2014

$209,100

5.3%

$214,433

8%

$203,712 - $225,155

October 2014

$207,500

5.1%

$205,922

4.3%

$195,626 - $216,218

November 2014

$207,200

6%

$204,204

4.5%

$193,993 - $214,414

December 2014

$208,200

5.3%

$205,783

4.1%

$195,493 - $216,072

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%

$201,052 - $222,215

May 2015

TBD

TBD

$220,799

4.2%

$209,759 - $231,839

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 over $30 billion in residential and commercial real estate assets. Auction.com has over 900 employees and headquarters in Irvine and Silicon Valley, California as well as offices in Austin and Plano, Texas, Atlanta, Denver, New York and Miami. Visit www.auction.com for more information.

SOURCE Auction.com, LLC



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