Existing home sales nationally in March were up 4.4 percent over February and almost 6 percent over a year earlier, according to the National Association of Realtors. That translates to 5.71 million homes sold last month, at a pace not seen in more than 10 years. From listing to closing, NAR reported, the sales cycle was brisk all month, spurred by limited inventory and high competition in most markets.
Existing sales gained most in the Northeast and Midwest. The Northeast, where the median price was $260,800, surged 10 percent to an annual rate of 760,000. That puts sales 4 percent higher than a year ago. In the Midwest, existing-home sales jumped 9.2 percent to an annual rate of 1.31 million in March, and are now 3.1 percent above a year ago. The median price in the Midwest was $183,000, up 6.2 percent from a year ago.
The South grew, but more slowly, seeing a 3.4 percent uptick in existing sales last month to 2.42 million. That’s 8.5 percent above a year ago. The West, however, saw a decline in existing sales last month. Sales were down 1.6 percent.
Lawrence Yun, chief economist at NAR, was bullish about what the numbers mean.
“The early returns so far this spring buying season look very promising as a rising number of households dipped their toes into the market and were successfully able to close on a home last month,” he said. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”
Not everyone was as enthusiastic. Tim Rood, CEO of The Collingwood Group, told Fox Business Network, "Unfortunately, This sales pace is not sustainable because inventories are actually going down. Existing homes sales will likely hit a wall over the summer unless something changes to increase inventory. Moreover, there remains too much uncertainty for current owners to know whether this is the right time to sell and whether they’ll find anything that makes economic sense and is suitable.”
Redfin’s chief economist Nela Richardson, also called March’s sales numbers unsustainable.
“Sales may be soaring, but inventory isn’t,” Richardson said. “Sellers are off to a slow start this year, as the number of homes newly listed in March fell 0.7 percent from last year. Redfin is just now starting to see a late-season lift in the number of homeowners interested in listing. As such, we expect sales to peak late this year--meaning a slower-than-normal June/July and a strong August/ and September.”
Tight inventory is still the biggest factor in the marketplace: supply was 6.6 percent lower compared to a year ago, Rood said.
“There were 1.83 million homes for sale on the last day of the month, which represented 3.8 months of supply at March’s sales pace. Properties stayed on the market for only 34 days,” he said.