The National Association of Realtors (NAR) reported that the sales of existing homes were down in August after four months of gains. Sales fell by 1.8% to an annual rate of 5.05 million.
Lawrence Yun, NAR chief economist blamed the decline on fewer investors. “There was a marked decline in all-cash sales from investors,” he said. “On the positive side, first-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”
Yun added, “As long as solid job growth continues, wages should eventually pick up to steadily improve purchasing power and help fully release the pent-up demand for buying.” On the local front, sales of existing homes in Leon County followed the national trend by falling 1.25% in August to an annual rate of 2,382. This comes on the heels of two consecutive months of growth in existing home sales in Leon County.
The chart on the front page shows that sales of existing homes in Leon County are beginning to slow down after a significant increase from September 2012 through November 2013.
During this period, the annual rate of existing home sales increased a whopping 30% from an annual rate of 1,745 homes in September, 2012 to a rate of 2,445 homes in November, 2013.
However, since November of last year, the annual rate of existing home sales has fallen from 2,445 to 2,382 in August of this year.
While existing home sales in Leon county have recently slowed, our area has been able to avoid the major drop off in existing home sales that hit the national market late last year and into the first part of this year.
The slowing at the national was in part due to inventory shortages. Yun said “there really should be stronger levels of home sales given our population growth. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
However, in Leon county price growth of existing homes has been significantly less than the national average and the average in the southern region.
Since August 2013, prices for existing home sales have increased 1.1% in Leon county compared to 5.6% in the U.S. and 5.1% in the south.
Looking forward, economists see continued job growth and an increase in wages as improving purchasing power and resulting in more home sales.