Chilly weather leads to cold salesDate posted: 2/6/14 01:45:00 PM
According to the National Association of Realtors, home sales were down in every region of the country in December and January.
NAR's chief economist Lawrence Yun detailed the results from NAR's Pending Home Sales Index. The index showed a lack of movement in the housing industry, dropping 8.7 percent to 92.4 in December, which was 8.8 percent lower than the previous December index of 101.3.
The December results are the lowest since October 2011 when the index was at 92.2.
"Unusually disruptive weather across large stretches of the country in December forced people indoors and prevented some buyers from looking at homes or making offers," Yun said.
Yun didn't blame it all on the weather. He added that home prices continue to rise faster than people's incomes, causing some potential buyers to stay seated on the sidelines. He also mentioned a lack of inventory as a reason many people haven't pulled the trigger on a move.
Yun believes there are some positives waiting to be uncovered once the snowy weather starts to dissipate. He said it might take a few months to gain traction, but he anticipates pent-up demand and job growth to be positive factors for the nation's housing market.
Home index by region
In the Midwest, NAR's Home Sales Index fell from 100.4 in November to 93.6 in December, marking a 6.9 percent drop from December 2012.
The South also had a 6.9 percent drop from December 2012 to last December, according to the NAR report. The South went from 113.7 on the Home Sales Index to 104.9.
The Northeast had an even bigger drop, with index numbers shrinking 10.3 percent from November and 5.5 percent from the previous December to 74.1.
In the Western United States, the index dropped 16 percent from December 2012, going from 95.5 to 85.7.
Drop in Wisconsin sale
One reason for the slowdown in the Midwest, albeit a smaller one than in the Northeast or West Coast, was the lack of transactions going on in Wisconsin.
While the La Crosse Tribune reported that January tends to be the slowest month of the year for Wisconsin home sales, last month seemed to especially show the impact of an exceptionally cold winter. According to the Wisconsin Realtors Association, existing home sales fell 6.8 percent from the same month a year prior, marking the first year since 2009 that home sales did not surpass the previous year's standard.
January also marked the second time in three months that the sales pace didn't increase from the same month from a year ago. Before the streak was interrupted, Wisconsin had 28 straight months of year-over-year gains.
Cindy Gerke, president of the La Crosse Area Realtors Association, told the La Crosse Tribune that the state's housing sales and statistics "kind of look like the temperature."
Ice, ice baby
According to National Weather Service records, the average temperature in La Crosse was more than 8 degrees below normal levels, plummeting to 9.8 degrees in January. In January 2013, the average temperature was 19.8 degrees.
But it isn't going to stay freezing forever. Gerke told the La Crosse Tribune she thinks sales will bounce back in February - consistently the slowest home sales month throughout the country - and March. She said March could be a springboard into the warmer months based on new listings and showings. Potential homebuyers in Wisconsin waiting to strike on the housing market should consider meeting with a financial expert see if they qualify for a fixed rate home equity line of credit.
"I'm not too worried about it," Gerke said. "I think we're going to have a very positive spring."
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