econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 26 March 2016

High-End Home Sales Track Equities Market

from CoreLogic

-- this post authored by Sam Khater

The recent correction in the equities market has underlined a strong correlation between stock performance and sales of high end houses. As the stock market swooned in recent months, so has the volume of sales for $1 million-plus homes.

This has been the case in the past, and recent performance of both the equities and the upper end of the housing market suggest this trend is continuing.

The powerful 'wealth effects' generated by the rapid rise in equities between 2009 and 2015 drove a large rise in the sales of homes that sold for $1 million or more.

Historically, sales of homes priced $1 million or more averaged 1.2 percent of all home sales. The spread between high-end sales and equities widened during the housing bubble but then moved more closely in unison. By the time the equity markets had peaked in May 2015, the $1 million or more share of the market had nearly doubled, averaging 2.2 percent for the remainder of the year.

Since its peak in May 2015, the S&P Index declined 10 percent as of mid-February (with some rallying the past 10 days). This decline in the S&P Index was matched by a 30 basis point or 15 percent decline in the $1 million or more share, which fell from 2.3 percent in November of last year to 2.0 percent in January 2016.

What will happen next depends upon both the trajectory of the stock market and, growing inventory levels.

While the inventory of homes priced below $500,000 remains very tight, the inventory is beginning to increase for all segments above that marker and especially for the $1-million segment.

In December 2014, there was a 9.3 months supply of homes for homes listed at $1 million or more, but that increased to 13.0 months by December 2015. This was the highest supply since January 2012 when inventories were high but rapidly declining and home prices were about to rebound. With more than a year's supply of inventory, prices, for the most part, won't be increasing.

The inventory situation began deteriorating in early 2015 when the year-over-year change in inventory started to outpace sales growth, a sure sign of an impending slowdown (Exhibit 3).

The slowdown in sales has begun to creep down the price spectrum and is beginning to occur for homes listed at $700,000 and above. This is consistent with the strong correlation between high- end sales and the stock market movements.

Going forward, equities remain key. If the markets continue to weaken, look for high-end sales to fall further, and inventories to climb. If the market stabilizes, as it has shown signs of doing most recently, the high-end market will stabilize as well.

© 2016 CoreLogic, Inc. All rights reserved.

Source

http://www.corelogic.com/blog/authors/sam-khater/2016/03/high-end-home-sales-track-equities-market.aspx#.VvZsCPkrKUk

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Consumers Carry Weak GDP Number Out of the Red
The Theory of the Monetary Circuit: A Critique
News Blog
Blackberry Quits Smartphone Production
New Water Plumes From Jupiter's Moon Europa Raise Hopes Of Detecting Microbial Life
The Top U.S. Metro Areas For Startup Growth
What We Read Today 30 September 2016
NASA Slow Motion Rocket Engine Test
23 September 2016: ECRI's WLI Growth Index Unchanged
Final September 2016 Michigan Consumer Sentiment Up Slightly
September 2016 Chicago Purchasing Managers Barometer Strengthens
August 2016 Personal Consumption and Income Year-over-Year Growth Slows.
Rail Week Ending 24 September 2016: Data Is Mixed
Infographic Of The Day: Global Energy Efficiency
Early Headlines: Asia Stocks Lower, Oil Soft, Japan Deflation Strengthens, Trade Backlash, Trump Fades, Veto Override Reconsidered, DB Could Take Down Merkel And Euro, Germany's "Adolfina" And More
What Are British People Most Proud Of
Investing Blog
Investing.com Weekly Wrap-Up 30 September 2016
Are You A Trader Or Investor?
Opinion Blog
Monetary Theory Gets Taken To School
First: 'Over-Population End-of Times' Now: 'Shrinking Population Disaster'
Precious Metals Blog
Where Silver Prices Are Headed Now After Fed's Latest Inaction
Live Markets
30Sep2016 Market Close: Markets Teetering On Investor Doubt, Will Collapse Of Deutsche Bank Matter, US Dollar Headed South Along With Gold, Higher Crude Prices Sure To Take Market Down
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved