All Indicators Point Toward Tight Housing Markets
In a word–inventory.
RE/MAX, Denver, said it’s all about housing inventories–or lack thereof. Tight inventories across the nation, particularly in the West, are in turn driving down home sales, driving up home prices, spurring bidding wars and reducing time on the market, according to the company’s monthly National Housing Report.
The report said home sales dropped by 0.2% in February from a year ago, while Days on Market average of 62 days was the lowest of any February in the report’s nine-year history. The Months Supply of Inventory fell to 3.1, also a February record–and underscored an average decline in inventory of 13.7% among the 52 markets reporting, said RE/MAX CEO Adam Contos. The February median sales price of $228,700 marked the 22nd consecutive month of year-over-year price increases.”
Of 52 markets, 18 metro areas saw double-digit percentage increases in median sales price year-over-year, while only two metros saw a year-over-year decrease in median sales price–Albuquerque, N.M., and Burlington, Vt.
“While the hot markets like Denver and San Francisco continue to see low supplies of inventory, we’re also watching more homebuyers migrate into unexpected markets,” Contos said. “In one year, Billings, Montana, saw a 59 percent increase in home sales, along with Boise, Idaho, with a 25 percent increase in sales.”
RE/MAX reported the overall average number of home sales increased by 3.5% compared to January but decreased by 0.2% from a year ago. Twenty-six metro areas experienced an increase in sales year-over-year, including Billings 59.2%, Boise, Idaho, 25.4%, Burlington, 20.4%, Milwaukee, 19.6% and Richmond, Va., 13.2%.
The report said 18 metro areas increased year-over-year by double-digit percentages, with largest increases seen in Las Vegas, 15.6%, San Francisco, 15.5%, Seattle, 15.4%, Pittsburgh, 14.8% and Minneapolis, 13.3%.
Average Days on Market for homes sold in February rose to 62, up two days from the average in January but down six days from a year ago. Metro areas with the lowest Days on Market were Las Vegas and San Diego at 36, Denver and Nashville at 35 and Seattle at 33. The highest Days on Market averages were in Wilmington, Del. at 117, Wichita, Kan. at 101, Washington, D.C., at 99 and Tulsa, Okla. at 93.
RE/MAX reported 48 of the 52 metro areas with a months’ supply at or less than 6.0, which is typically considered a seller’s market. Metro areas with the lowest Months’ Supply of Inventory continued to be in the west with Denver and Seattle at 1.0 and San Francisco, CA, at 1.1.
