• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Logo
  • Login / Register
  • 916.221.0886
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Home
  • Search
    • Advanced Search
    • Map Search
    • Luxury Listings
    • Open Houses
    • Just Listed
  • Sellers
    • Sell Your Home
    • What’s My Home Worth
    • Our Seller Guide
    • Live Market Reports
  • Buyers
    • Buyers
    • New Listing Alerts
    • Mortgage Calculator
    • Our Buyer Guide
    • Live Market Reports
  • Neighborhoods
  • About
    • About Us
    • Meet the team
    • Our Awards
    • Client Reviews
    • Giving Back
    • Careers
  • Blog
  • Contact
Home > Why are Existing Home Sales Down?

Why are Existing Home Sales Down?

August 30, 2018 by jleonardi

Why are Existing Home Sales Down? | Simplifying The Market

The latest Existing Home Sales Report issued by the National Association of Realtors (NAR) revealed that home sales have decreased for four consecutive months and are at their slowest pace in over two years. This has some industry leaders puzzled considering the fact that the economy is strengthening, unemployment is down, and wages are beginning to rise. This begs the question: “Where are the buyers?”

Actually, agents in the field of most communities are still seeing strong desire from prospective purchasers. They have a list of potential buyers ready to go if the right houses come on the market and they claim it is not a shortage of demand, but is instead a shortage of inventory that is causing the market to soften.

Why is there a shortage of inventory?

You only need to look at the graph below to understand:

Why are Existing Home Sales Down? | Simplifying The Market

New construction sales over the last ten years are far below historic numbers from 1995-2002.

A recent industry report looked at building permits and concluded:

“If construction over the past decade matched historic norms, accounting for population change, the country would have had 2.3 million more single-family home permits.”

That decade of not building enough homes is the primary reason for the concerns about today’s market.

Wait, weren’t we talking about ‘existing’ home sales?

Some may argue that NAR’s sales report deals with existing home sales and not new construction, and they would be correct. However, reports have shown that one of the main reasons why existing homeowners are not selling is because they can’t find homes that meet the needs of their current lifestyles. Historically, the upgrades in a newly constructed home were the answers to those needs.

Over the last decade, however, there were fewer homes built to satisfy this move-up seller. Consequently, there are many homeowners who stayed in their homes for a longer tenure, instead of putting their homes up for sale.

Bottom Line

As more new homes are being built, there will be more housing inventory to satisfy current demand which will cause prices to moderate and sales volumes to increase.

Filed Under: Latest Blog Posts

Reader Interactions

Primary Sidebar

Greater Sacramento Market Reports

View Now

New Listing EmailNotifications

Sign Up

What's YourHome Worth

Details

Categories

  • In The News
  • Latest Blog Posts

ClientTestimonials

"I’ve known John Leonardi for about 9 years. He is a great guy and one of the most knowledgeable real estate agents in the business. You can’t go wrong with John representing your interests... continued"
- Steve K. – El Dorado Hills, CA
View All
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest

Footer

logo

Leonardi Real Estate Inc.
2795 E. Bidwell Street #100-144
Folsom, California 95630

Search
About
Team
Sellers
Buyers
Careers
Blog
Contact

Receive OurNewsletter

Sign up and stay informed about what is going on with the local market.

  • This field is for validation purposes and should be left unchanged.

CalBRE#01737387  •  sitemap   •   admin   •   ©2019 All Rights Reserved  •  Real Estate Website Design by IDXCentral.com