Auction.com Sees Rebound in Home Sales

IRVINE, CA—Even amid what EVP Rick Sharga calls “strong headwinds” facing the housing market, Auction.com is predicting a rebound from the market's weak showing last month. The GlobeSt.com Thought Leader's latest Real Estate Nowcast projects home sales to come in at 5.04 million for February, with a median sales price of $201,077.

This month's Nowcast marks the expansion of Auction.com's forecast to include pricing trends. The projected sales range from Auction.com for existing-home sale prices is between $191,649 and $211,718 during February, with the median price showing a 6% year-over-year increase. The company is incorporating Google Trends data and proprietary information from transactions occurring on its own residential sales platform to gauge pricing information as it occurs.

The rebound Auction.com predicts will be from what Sharga describes as the January landscape of “extraordinarily limited inventory, tight credit and, in some markets, problems with affordability. A number of formerly red hot California markets experienced declines in both pricing and sales volume in January, which suggests that some exceeded affordability thresholds.”

Nationally, Sharga says, “We saw seasonal market challenges characteristic of the winter months, especially in the Northeast and Midwest. Whatever the specific reasons, January didn't provide a roaring start for 2015 home sales.”

In fact, the National Association of Realtors on Monday released existing-home sales data for January that reflected the poorest showing in months, as sales declined 4.9% to 4.82 million units. Auction.com's January Nowcast originally projected 5.06 million existing home sales during the month, but the company revised its estimates downward a week later, and ended up hitting closer to the mark than consensus estimates when NAR's actual numbers came out.

Auction.com's February Nowcast coincides with the release of the latest S&P/Case-Shiller home price indices, with pricing for December 2014 reflecting a modest Y-O-Y uptick compared to the previous month for two of the three indices from S&P Dow Jones. The 10-City Composite gained 4.3% year-over-year, up from 4.2% in November, while the 20-City Composite gained 4.5% year-over-year, compared to a 4.3% increase in November. However, the S&P/Case-Shiller US National Home Price Index, covering all nine US census divisions, recorded a 4.6% annual gain in December versus 4.7% for the previous month.

The housing recovery is faltering,” says David M. Blitzer, managing director and chair of the index committee at S&P Dw Jones Indices. “While prices and sales of existing homes are close to normal, construction and new home sales remain weak.” Blitzer adds that this softness occurs “despite favorable conditions elsewhere in the economy: strong job growth, a declining unemployment rate, continued low interest rates and positive consumer confidence.”

Auction.com's chief economist, Peter Muoio, sees the conditions cited by Blitzer as “signs that point toward improvement” in the modest pacing of home sales that the market experienced last year and has continued to see thus far in 2015. “Overall, we hope that a stronger national economy may provide a long-awaited boost to the market as this year progresses.”