Qualified Remodeler Magazine

JAN 2019

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

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Existing-home sales, a positive indicator of future remodeling activity, increased in November, according to the National Association of Realtors (NAR), marking two consecutive months of increases. Three of four major U.S. regions saw gains in sales activity last month. Total existing-home sales—complet- ed transactions that include single-family homes, townhomes, condominiums and co- ops—increased 1.9 percent to a seasonally adjusted rate of 5.32 million. Sales are down 7 percent from a year ago (5.72 million in November 2017). Lawrence Yun, NAR's chief economist, says two consecutive months of increases is a welcome sign for the market. "The market conditions were mixed, with good signs of stabilizing home sales compared to recent months, though down significantly from one year ago. Rising inventory is clearly taming home price appreciation." The median existing-home price for all housing types in November was $257,700, up 4.2 percent from November 2017 ($247,200). November's price increase marks the 81st straight month of year-over-year gains. Housing price gains are fueling confidence in remodeling, but have also created housing affordability issues for younger households seeking to own a home. Total housing inventory at the end of November decreased to 1.74 million, down from 1.85 million existing homes available for sale in October. This represents an Housing Economics Existing-Home Sales, Prices Trend Up Market Update BuildFax Housing Health Report reveals declines for first time since 2011 The BuildFax Housing Health Report found that the year-over-year rate of single-family housing authorizations, maintenance and re- modeling have all decreased. This is the first time since 2011 that all three categories have decreased in the same month, pointing to a potential market slowdown on the horizon. The report, covering activity in Novewmber 2018, tracks U.S. property condition and his- tory data to deliver macroeconomic as well as more granular trends. It also says eight of the last 10 instances of blanket declines occurred during the recession and its recov- ery in 2008 and 2009. "More so now than in years prior, the compounding effects of natural disasters, scarcity in the construction labor market and recent tariffs have impacted housing growth—not to mention systemic factors, like rising mortgage rates, that influence consumer behavior," says BuildFax COO Jonathan Kanarek. "While it's natural to see some leveling off aƁer steep growth, the next few months will be telling; whether a downturn is on the horizon or the market is simply soƁening is yet to be seen." The report also looked at commercial construction, which shows decreases this month that are in line with similar residen- tial declines. However, commercial con- struction over the last five years has seen steady increases, primarily in construction spend. In fact, BuildFax data suggests there increase from 1.67 million a year ago, howev- er. Unsold inventory is at a 3.9-month supply at the current sales pace, down from 4.3 last month and up from 3.5 months a year ago. Western Region Declines November existing-home sales in the Northeast increased 7.2 percent to an an- nual rate of 740,000, 2.6 percent below a year ago. The median price in the Northeast was $291,400, which is up 6.5 percent from November 2017. In the Midwest, existing-home sales rose 5.5 percent from last month to an annual rate of 1.34 million in November, down 4.3 percent from a year ago. The median price in the Midwest was $199,100, up 2.6 percent from last year. Existing-home sales in the South grew 2.3 percent to an annual rate of 2.20 million in November, down 5.6 percent from last year. The median price in the South was $223,600, up 3.2 percent from a year ago. Existing-home sales in the West de- clined 6.3 percent to an annual rate of 1.04 million in November, 15.4 percent below a year ago. The median price in the West was $380,600, up 1.8 percent from November 2017. "A marked shiƁ is occurring in the West region, with much lower sales and very soƁ price growth," Yun says. "It is also the West region where consumers have expressed the weakest sentiment about home buying, largely due to lack of affordable housing inventory." TOTAL EXISTING HOME SALES, SA ANNUAL RATE MILLIONS 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2018.11 2018.09 2018.07 2018.05 2018.03 2018.01 2017.11 2017.09 2017.07 2017.05 2017.03 2017.01 2016.11 2016.09 2016.07 2016.05 2016.03 2016.01 2015.11 2015.09 2015.07 2015.05 2015.03 2015.01 2014.11 EHS TOTAL SALES Source: The National Association of Realtors, 2018 10 JANUARY 2019 QR QUALIFIEDREMODELER.COM IN BRIEF

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