Nationally, seasonally adjusted sales figures for existing homes dropped 2 percent between February and March. Locally, existing home sales rose for the second consecutive month, but we normally expect that kind of increase at this time of year as housing activity usually picks up in the spring and summer months. In order to evaluate our local market more realistically, we applied the seasonal adjustments from the national data to our local data. This assumes that the Kansas City market experiences seasonal changes similar to the national housing market.
Using the seasonal adjustment, we see that existing home sales dropped 9 percent between February and March. So it would appear that the housing market (both nationally and locally) is still struggling to gain momentum.
The March numbers were not without some good news, however. Local housing supply (current inventory divided by number of sales) for new homes continued dropping to 12.8 months. It was 20.9 months in January. Existing home supply also declined slightly to 7.9 months. A good rule of thumb says a five-to-six month supply indicates a balanced market (below five is a seller’s market and above six is a buyer’s market).
Also, the average home sales price increased in March to $168,384. It had been decreasing over the past three months.
So with housing supply declining and average homes sale prices increasing, the stage is set for buyers who are trying to time the market to go ahead and buy homes. If enough buyers do that, hopefully the logjam will be broken. Families looking to move will be able to sell their existing homes and make their moves. Such a domino effect could see home values recover rather quickly, making homeowners more confident that their investment is sound. This renewed confidence is just what the general economy needs to start its recovery.
The March numbers were not without some good news, however. Local housing supply (current inventory divided by number of sales) for new homes continued dropping to 12.8 months. It was 20.9 months in January. Existing home supply also declined slightly to 7.9 months. A good rule of thumb says a five-to-six month supply indicates a balanced market (below five is a seller’s market and above six is a buyer’s market).
Also, the average home sales price increased in March to $168,384. It had been decreasing over the past three months.
So with housing supply declining and average homes sale prices increasing, the stage is set for buyers who are trying to time the market to go ahead and buy homes. If enough buyers do that, hopefully the logjam will be broken. Families looking to move will be able to sell their existing homes and make their moves. Such a domino effect could see home values recover rather quickly, making homeowners more confident that their investment is sound. This renewed confidence is just what the general economy needs to start its recovery.
