Sales of existing homes were weaker than expected in March. But behind the headline numbers, an even more disconcerting dynamic is playing out. Both the high end and the low end of the market are struggling due to completely different factors.
In contrast, sales of high-end homes were soaring back in 2017. Million-dollar plus sales were up nearly 31% that year. This March, sales in that price class were down 11% year over year, even though there are plenty of those homes for sale. In fact, there is nearly a year's worth of luxury supply available for sale now. Compare that to barely 3 months' worth of low-end supply.
The impact is already pretty clear in New York city and in much of California, some of the priciest markets in the nation. Los Angeles home sales fell 12% annually in March, according to the California Association of Realtors, even as the supply of listings increased. Sales in the San Francisco Bay Area were down nearly 11%.