Buyers abscond as home prices skyrocket again

• Home sales in September dipped well below expectations. This recess is preceded by two profitable months.
• The volume of homes placed for sale was almost 3% less than September of the previous year. This means 4 consecutive months of annual descent.

Sales of existing homes in September dipped well below expectations, following two months of profit. The reason for this is declining supply alongside high prices. Prices spiked nearly 6% per annum, based on figures from the National Association of Realtors, indicating the highest gain since January 2018.

Roof-hitting prices are ascribed in part to lower mortgage rates. Lower rates imply inexpensiveness, with purchasing power shifting to the buyers, forcing prices to increase.
Realtors claim that there is an increase in demand, which they estimate by the frequency at which their lockboxes are opened. Lockboxes, which grant entries to homes when the owner is not in, can now be tracked electronically. Buyer influx across homes is now on the rise; however, the influx does not convert to enhanced sales.

The volume of homes placed for sale was almost 3% less than September of the previous year. This means 4 consecutive months of annual descent.

Builders are bolstering production gradually but mainly in the upmarket areas. PulteGroup observed a boost in sales for fresh orders in Q3. Its CEO alluded this to poor mortgage rates, which enhances affordability. However, Yun was frustrated with the homebuilding market, on account of the profound dearth of general housing.

More competition is required in the homebuilding segment. Well-established builders are performing remarkably, but the market needs small builders to provide stiff competition. We also need to identify other viable options.

Among other solutions, he suggested repurposing ailing shopping malls into condominiums and erecting more micro-units.