Industry Insights on Recent Housing Data

• August 23, 2023
• Carey M. Heyman, CPA

This week, the National Association of Realtors (NAR) released housing data from July. Some important takeaways include:

• Existing home sales, which include single family homes, townhomes, condominiums and co-ops, and are based on transaction closings from the Multiple Listing Services, fell 2.2%.
• Home sales decreased 16.6% from one year ago.
• The median existing home sales price increased 1.9% from one year ago to $406,700.
• The inventory of unsold existing homes increased 3.7% to 1,110,000. This amount is equal to over three months’ supply at the current monthly sales pace.
• 26% of the transactions were all-cash sales. This percentage was the same as the prior month, but up 2% from one year ago.
• Foreclosures and short sales only represented 1% of the distressed sales, which was approximately the same from the prior month and the prior year.

At CLA, everything begins with living our Promise, which is to know and help you. We are able to do that because our people are so much more than accountants – they are colleagues and friends immersed in their respective industries, which means they possess the deep industry and technical knowledge needed to be real difference-makers for you and your organization. Here, some of those colleagues share their reactions to the recent housing data and their predictions for what may lie ahead:

“Media outlets keep talking about a ‘housing recession,’ hurt by rising interest rates. The July data released by the NAR shows the true picture. The single family housing market is proving to be quite resilient. Single family real estate, backed by stronger underwriting standards since the Great Financial Crisis, have improved, reducing the level of distress and volatility of pricing. We are continuing to monitor the market for any further signs of distress, but are currently advising our clients to ‘Stay the Course’, which is the central them of our 2023 Outlook.”

– Christopher Dhanraj, Managing Principal of Investments

“First-time home buyers, certain income classes and select demographic groups are still struggling to pull the trigger in this economic environment. Unfortunately, those waiting for ‘deals’ may be hard pressed to find one. While those looking to acquire a single family home might feel like they can ultimately wait it out, financial institutions are applying pressure to their mortgage divisions on lagging new and refinancing volume. Until the Federal Reserve declares a victory in its battle against inflation, there could be a stalemate between home buyers and financial institutions.”

– Susan Sabo, Managing Principal of Financial Services

“There may be negative trends and headwinds, but there still may be opportunities for those that are willing to work to uncover them. A client recently shared that he discovered a hidden [real estate] gem, acquired it, and soon thereafter, received an unsolicited offer, which yielded a significant profit. We recommended that clients remain disciplined and stay the course.”

– Ken Zacharias, Principal

Source: National Association of Realtors

Tags: Banks, Economy, Financial Institutions, Financial Services, Interest Rates, Real Estate, Sales, Single family homes, Single-family homes, Federal and state taxation, including proposed regulations, Industry best practices, Industry trends/analysis | Comments Off on Industry Insights on Recent Housing Data