September Existing Home Sales to Rebound

IRVINE, CA—Existing home sales for the month of September are now fall between seasonally adjusted annual rates of 5.23 and 5.57 million annual sales, with a targeted number of 5.4 million – up 1.7% from August and 5.9% from a year ago. This is according to Auction.com, LLC, the nation’s leading online real estate marketplace, which has just released its latest Auction.com Real Estate Nowcast. Earlier this month, the National Association of Realtors (NAR) released its existing home sales data for August, reporting an unexpectedly large 4.8% drop in home sales to 5.31 million units, the second largest decline in more than four years. While the modest growth that the Auction.com Real Estate Nowcast predicts for September will not be enough to completely recoup all of the losses experienced in August, it shows that sales are expected to move back in the right direction and maintain solid year-over-year progress. “While we reported signs last month that the housing market was cooling off, no one anticipated the kind of decline in sales volume that we saw in August,” said Auction.com executive vice president Rick Sharga. “Some of this could be due to the severe volatility we saw in the stock market, some could be less activity from foreign buyers due to economic issues in Europe and China, and some could be the result of job losses in oil-producing states. Since month-to-month sales numbers can vary significantly, this could turn out to be nothing more than a temporary blip on the radar, but it’s certainly worth watching.” “Despite weaker than anticipated sales activity in August, housing remains strong, with sales up 6.2% from a year ago,” said Auction.com chief economist Peter Muoio. “All the right underpinnings are in place to support continued demand, from improving labor markets and wage growth to a more approachable lending environment. That said, we’re expecting growth to assume a much more modest pace as we approach the end of 2015.” Home prices have also slipped recently on a seasonally adjusted basis, but remain healthy according to Auction.com’s findings. NAR reported a 4.7% year-over-year increase in median existing home prices August to $228,700 – close to the median price of $230,666 that Auction.com predicted last month. Findings from the Auction.com Real Estate Nowcast suggest that sales prices for existing homes will fall between $216,372 and $239,148 in the month of September, with a targeted price of $227,760. This represents an 8.9% year-over-year increase.

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 Nowcast model has proven highly accurate over the course of 2014 and into 2015, Auction.com says.