The latest pending home sales report from NAR came out today, and it has good news and bad news.
Good news: Pending home sales are on the rise from the previous month, and the “hit” that was taken this month is maybe a small dent in the overall picture at a 0.7% decrease from October 2018.
Bad news: The year-over-year is still much lower than this point last year with the West seeing again the sharpest decline in pending home sales, reaching the lowest mark in pending home sales since 2014.
In November 2018, the PHSR revealed that there has been a 7.7% decrease from November 2017, meaning this is the 11th straight month for annual decreases for 2018. While jobs continue to grow — even though at a snail’s pace right now — more people are slowing themselves to come to the market.
All four regions in the USA saw a sustained drop from this time in 2017 with the West receiving yet again the sharpest decrease. Lawrence Yun of NAR states that there are several factors that could be weighing this region down, however, unaffordability was the one costing the region the most. “Land cost is expensive, and zoning regulations are too stringent. Therefore, local officials should consider ways to boost local supply; if not, they risk seeing population migrating to neighboring states and away from the West Coast.”
There is not much to report in terms of those in the southern regions. We only saw a small decrease (2.75% decrease from October 2018). However, the forecast states that this slowdown — though expected — signals that inventory will be back on the rise as things continue to slow down, especially concerning the current government shutdown. This is only due to putting further weight on the economy, forcing it to drag its feet as it waits for matters to be resolved. It is yet unknown how this shutdown will affect the economic climate down the road, but it might be closer to a “kicking the can further down the road” scenario and causing a bottleneck for us in the future. We might not feel these effects until later in 2019.
What does this mean for your marketing efforts? Be prepared for a slowdown that’s like molasses in winter. This might mean you’ll have to think of another strategy to get others motivated and involved in the market. Many people look to be waiting, but it will be your job to create hype and urgency for your listings and buyers.
What are your opinions on today’s report?