Home Sales Down -11% from Year Ago, Condos -23%, but Bounce off Lockdown-Lows

Home Sales Down -11% from Year Ago, Condos -23%, but Bounce off Lockdown-Lows

More signs of a move from the cities to the suburbs? Supply of houses is tight; condos are piling up.

By Wolf Richter for WOLF STREET.

Sales of existing homes (closed transactions of single-family houses, townhomes, condos, and co-ops) in June fell 11.3% compared to June last year, to a “seasonally adjusted annual rate” of 4.72 million homes, according to the National Association of Realtors. Sales were down 18% from the recent peak in February. On a month-to-month basis, sales bounced off 20.7% from the historic lockdown-low in May (historic data via YCharts):

The 11.3% year-over-year drop in the seasonally adjusted annual rate of sales was the sharpest drop, after the plunges in April and May, since April 2011 (historic data via YCharts):

Sales fell in all regions, compared to June last year:

  • Northeast: -27.9%
  • Midwest: -13.4%
  • South: -4.0%
  • West: -13.6%

Condo sales in deep trouble, house sales drop less, compared to June last year:

  • Single-family houses: -9% year-over-year, to 4.28 million units seasonally adjusted annual rate.
  • Condos and co-ops: -22.8% year-over-year to 440,000 units seasonally adjusted annual rate.

From the big cities to the suburbs?

This is a theme that is now propagated widely, and anecdotal evidence has been accumulating to support it, including the continued massive weakness in condo sales (-22.8% year-over-year in June after having plunged 41% in May). These “closed sales” in June reflect contracts signed largely in May and April, so it’s early to draw conclusion about a long-term trend.

The NAR report also mentions this from-the-city-to-the-suburb theme as a possibility:

“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival. Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”

There had been a huge surge over those ten years in high-rise construction in city centers – condos and apartments, and mostly higher-end. High-density living has its advantages, including short or no commutes, being close to lots of things to do, particularly in lively walkable city cores. High-rise living can also offer panoramic views.

But the pandemic has shed a very different light on this type of living arrangement, and it makes intuitive sense to see a move from the city centers to the suburbs, especially now with commutes no longer being an issue for some people as they have switched to work-from-home, with the expectation that this will largely remain in place going forward.

Prices rise for single-family houses, barely tick up for condos.

The median price of all types of homes – meaning half sold for more and half sold for less – rose 3.5% from a year ago to $295,000.

Continue Reading / Wolf Street >>>

Sharing is caring!

Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.