Auction.com Real Estate Nowcast Predicts December Existing Home Sales Of 4.98 Million Units
Sales predicted to be flat compared to November and 2.2 percent above year-end 2013 as housing market continues its slow and jagged recovery
IRVINE and SILICON VALLEY, Calif., Dec. 23, 2014 /PRNewswire/ -- Auction.com, LLC, the nation's leading online real estate marketplace, has released its December Auction.com Real Estate NowcastTM which projects that existing home sales for the month will fall between seasonally adjusted annual rates of 4.79 and 5.18 million annual sales, with a targeted number of 4.98 million. This prediction suggests that sales will be up slightly from one year ago and essentially flat compared with November's lower-than-expected 4.93 million sales figure, which was released on December 22nd by the National Association of Realtors® (NAR®).
"In a month where consensus forecasts were all too optimistic, we are reminded that the housing market is recovering in fits and starts, and there remain significant headwinds," said Auction.com Executive Vice President Rick Sharga. "Multiple factors may have contributed to November's weaker-than-expected results, including a drop in inventory, declining investor activity, a sharp sales decline in the West, possibly reflecting affordability issues, and unexpectedly harsh weather conditions at the end of the month in the Midwest and Northeast."
Auction.com Research points to the increase in first-time homebuyers (comprising 31 percent of sales in November according to NAR), as well as the strengthening pace of annual household formations reported by the Census this Fall, as key ingredients for normalizing demand for housing among owner-occupiers. Additionally, a strengthening labor market suggests a firmer basis for demand heading into 2015, while lower mortgage rates and ongoing initiatives to improve mortgage accessibility could motivate more prospective buyers to enter the market.
Market Continues to Ebb and Flow
As the December 22nd release of NAR's November existing home sales data proves, the uneven market recovery and volatility of month-to-month numbers make it challenging to accurately predict results. Based on October's sales estimate from NAR, Auction.com predicted that November home sales would measure a seasonally adjusted annual rate of 5.25 million – well above NAR's November data, but in line with consensus estimates.
"The Auction.com Nowcast model has been highly accurate in predicting existing home sales over the past 10 months, and our testing has shown over 97 percent accuracy over a 10 year period, so it's very rare for a number to fall outside of our confidence range like it did in November," said Auction.com Chief Economist Peter Muoio. "This apparent anomaly required a closer look at possible outside factors that the model wasn't able to account for, such as a slowdown in purchases late in the month due to inclement weather, or the potential for November predictions to be skewed somewhat by the unexpectedly strong momentum coming out of October. Because the Auction.com Nowcast is based on an autoregressive model, prior month momentum can sometimes play a significant role in predicting the current month's activity."
Auction.com Nowcast Model Had Proven Highly Accurate Over the Course of 2014
| Month |
Reported Existing Home Sales (in millions) |
Auction.com Point Estimate (in millions) |
Auction.com Predicted Range (in millions) |
| January 2014 |
4.620 |
4.914 |
4.722 – 5.105 |
| February 2014 |
4.600 |
4.721 |
4.537 – 4.905 |
| March 2014 |
4.590 |
4.771 |
4.585 – 4.958 |
| April 2014 |
4.660 |
4.831 |
4.643 – 5.020 |
| May 2014 |
4.910 |
4.877 |
4.686 – 5.067 |
| June 2014 |
5.030 |
5.082 |
4.884 – 5.281 |
| July 2014 |
5.140 |
5.173 |
4.971 – 5.374 |
| August 2014 |
5.050 |
5.232 |
5.028 – 5.436 |
| September 2014 |
5.170 |
5.098 |
4.899 – 5.296 |
| October 2014 |
5.260 |
5.178 |
4.976 – 5.380 |
| November 2014 |
4.930 |
5.252 |
5.047 – 5.456 |
Sources: NAR, Google, Auction.com
About Auction.com's Real Estate Nowcast
The Auction.com Real Estate Nowcast combines industry data, proprietary company transactional data and Google search activity to predict market trends as they are occurring – weeks before the findings of other benchmark studies are released. Building upon the groundbreaking work by Google Chief Economist Hal Varian, the Nowcast model extends a traditional autoregressive-forecasting model to incorporate contemporaneous information that provides significantly enhanced accuracy.
For more information about Nowcast and access to the latest data, click here.
About Auction.com:
Auction.com, LLC, is the nation's leading online real estate marketplace. Founded in 2007, the company has sold over $26 billion in residential and commercial real estate assets. Auction.com has over 900 employees and headquarters in Irvine and Silicon Valley, California as well as offices in Austin and Plano, Texas, Atlanta, Denver, New York and Miami. Visit www.auction.com for more information.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/auctioncom-real-estate-nowcast-predicts-december-existing-home-sales-of-498-million-units-300013513.html
SOURCE Auction.com, LLC
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