This month’s issue of STAT leaves us in the middle of our buying season, the time of year when our monthly sales volume peaks. The chart below is based on a 14-year running average of monthly sales volume in Maricopa County. It depicts the seasonal nature of our housing market. There have been 1,143,088 homes sold between January 1, 2001 and December 31, 2014 by ARMLS Subscribers.
14-Year Average Monthly Sales Volume Distribution (2001 – 2014)
Pending sales contracts hit their highest point in 2014 on April 23 with 8,103 pending listings. Pending sales are a leading indicator of future sales. There were 7,659 total home sales in April of 2014, which was the largest single month in sales volume in 2014. The current high mark for pending sales this year occurred on April 23 the same day as 2014 when 8,766 homes had pending sales contracts. Sales for the first four months of 2015 are 9% higher than sales for the first four months of 2014 and this trend is expected to continue.
When we look at individual monthly sale numbers over the past 14 years, we see that March, April, July and August each accounted for the highest monthly sales total only one year each. May and June, in contrast, accounted for the highest monthly sales volume 5 times.
In STAT last month I talked about the year-over-year improvement we’d seen over the prior two months in the number of newly constructed homes and I used current building permit data as an indicator this trend would continue. In April, The Information Market reported 674 new builds sold in Maricopa County compared to 680 last year at this time. It looks like I backed the wrong horse. I’m a baby boomer and what does any good analyst from my generation do when his conjectures are wrong? I do what we do best, I blame someone else. After evaluating every newly constructed home transaction over the last three months and coupling my observations with analysis done from fivethirtyeight, there was only one conclusion to draw, the Millennials are to blame.
When I went back and reviewed the last three months of new home sales transactions it became clear that the first names of the people purchasing new builds were dominated by boomers, the buyer’s names read like my sixth grade roll call. There is some fantastic statistical analysis on first names corresponding to age, read it here. Simply put, the Millennials are not doing their part, and quite frankly they are running out of excuses. In the first quarter of 2014 Millennials surpassed Generation X and now comprise the largest share of the American workforce. The name article and the chart below support these conclusions.
Walt Hickey, a writer and Millennial at fivethirtyeight, has the best retort to my contempt — “53.5 million – We did it! Millennials are now a plurality of American workers, with 53.5 million people ages 18 to 34 in the workforce in 2015, compared to 52.7 million Gen Xers and 44.6 million baby boomers. I was born in the ’90s and I have a job — get used to it, boomers, my people are here to stay.”
Pending Price Index (PPI)
Our last Pending Price Index projected an April 2015 median price of $200,000 with the actual median coming in at $202,700. Looking ahead to May 2015, the ARMLS Pending Price Index projects a median sales price of $205,000. We began May with 12,287 residential listings under contract compared to 11,957 at the beginning of April. May 2015 sales volume will undoubtedly exceed May 2014 (7,445). We expect sales this month to be in line with April’s sales volume figure. Our estimated sales volume last month of 8,500 was 1.6% higher than the actual sales figure of 8,367.