MarketNsight Principal John Hunt recently projected June pending new home sales would follow suit with the record-breaking numbers of May pending sales – and they did. MarketNsight is pleased to announce June’s pending new home sales were up 25% year-over-year!
“Partial July data paints the same picture and will be yet another record for new pending sales,” Hunt said. “Is the market just that good? Yes and no.”
The data shows new pending sales declined sharply at the beginning of 2018 as interest rates began to rise. There was also a temporary increase in closings as shoppers on the fence locked in at lower rates. After that, closings followed pending sales straight down.
Interest rates peaked in November 2018 and pending sales bottomed soon after. As interest rates have continued to drop, pending sales have exploded.
According to Hunt, we are really just seeing pent-up demand from 2018 pulled into this year. The market is extremely price-sensitive and shoppers who do not have to buy will not until the price is right.
MarketNsight expects closings to follow pending sales into positive territory in the next several months. After being negative since September 2018, national permits turned the corner and were positive in July.
Once the interest-rate-driven, pent-up demand is satisfied, the forecast is for continued long-term moderation as builders struggle to supply demand in the lower price points.
Hunt’s prediction for the remainder of the year is that long term sales moderation will continue. However, the good news is that the Atlanta market has recovered from the Q4 2018 and Q1 2019 devastation caused by the interest rate hike that slowed sales and kept potential homebuyers out of the market.
MarketNSight is focused on helping home builders and developers make smart decisions related to purchasing land and pricing product. Its groundbreaking Feasibility Matrix® systemizes the decision-making process and creates a one-stop-shop for gauging new home community feasibility including ranking by builder and subdivision and developed lot and raw land sales. To learn more or to schedule a demonstration, visit www.MarketNsight.com.
MarketNsight currently serves 24 cities in six states – Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. Look for the addition of more cities soon!
To schedule a demonstration of the MarketNsight Feasibility Matrix®, call 770-419-9891 or email info@MarketNsight.com. For information about MarketNsight and Hunt’s upcoming speaking engagements, visit www.MarketNsight.com.