March Existing Home Sales Data Show A Market That’s In Trouble

The National Association of Realtors reported existing home sales for March yesterday.   The report surprised everyone (except me) by showing a slight decline from February and a 7.5% decline from March 2013.   Wall Street analysts of course were expecting a big gain in March sales.

I wrote an article for Seeking Alpha which examines the data and analyzes the implications.  You can read the article here:   March Existing Home Sales Show A Deteriorating Market.

Perhaps the most troubling aspect about the March report is that the “bad weather/dog ate my homework” excuse for poor economic reports is no longer valid.  Perhaps our policy implentors should examining the policies they have put in place which are causing the middle class – the primary home buyer – to disappear.


2 thoughts on “March Existing Home Sales Data Show A Market That’s In Trouble

  1. Hello Dave,

    Love your commentary. How do you think the housing market will play out? Do you think the herd will realize that the housing market has peaked and look for the exits all at once? Do you see a slow downward trend? I see a lot of overpriced houses. I suspect baby boomers and foreign investors are looking for yield. To me we are seeing a third world bubble. Hot money flows in and like a magnet attracts even more money. Then some catalyst causes the crash. Would love to hear your thoughts on the subject.

    1. The middle class’ ability to buy a home is quickly deteriorating. Median household disposable income is declining every month now, it seems. Chasing yield is the death knell of any investment bubble. Housing will be no different. I think the market could start to seize up later this year like it did in 2007/2008. Instead of subprime mortgages blowing up, it will be investment funds and flippers looking unload unrented properties quickly.

      The foreign-buyer ship has sailed. Countries like China who had investors chasing housing in the U.S. have big problems of their own. It’s already been documented that the big Chinese home buyers are no longer in play here.

      It could get really ugly – if not this year then next.

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