The existing-home sales report is released on or near the 25th of each month by the National Association of Realtors. Behind the stats, you will find four important factors that help explain how existing-home sales are configured.
Why existing-home sales are calculated on a seasonally adjusted annual rate. Seasonally adjusted annual rates are used in reporting existing-home sales data to factor seasonal variations in resale activity. For example, home sales volume is higher in the summer than in the winter, primarily because of differences in the weather and family-buying patterns in the U.S.
How seasonally adjusted annual sales rates are calculated. When calculating seasonally adjusted annual rates, the sales rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months.
Why median prices are compared with the same period a year earlier. Median prices in the existing-home sales report are not calculated on a month-to-month basis because seasonal changes and family-buying patterns in the composition of sales data can distort the median price. As a result, median price comparisons for existing-home sales are compared with the same period a year earlier. This is viewed as a more accurate and valid comparison of existing-home prices.
Why condo prices tend to be high. In a given market area, condos typically cost less than single-family homes. But in the existing-home sales report, condo prices tend to be high because there’s a concentration of condos in high-cost metro areas. In fact, the national median condo price — which excludes the concentration of condos in high-cost metro areas — is usually lower than the median single-family price.
Why all pricing is local. Despite national trends, pricing differs from city to city and neighborhood to neighborhood. It is essential to get hyper-local statistics when thinking of buying or selling. While national averages are good at predicting trends or recognizing market shifts, it is still more salient to have local data. That’s where a great hyper local analysis will assist you in decision making. I put out a weekly statistical analysis, zip code by zip code, that gives a look at all factors affecting each local market. Please feel free to contact me for a copy for your neighborhood.