In September, inventories have returned to levels of a year ago and the buying season ended with the greatest price gains seen in years, according to realtor.com’s September trend report.
Many markets in California, Arizona and Nevada–plus Detroit–that were the center of the housing crisis now appear to be well on the road to a robust recovery. More than 20 percent of the markets covered by realtor.com reported exceptionally large year over year list price gains of 12 percent or more and exceptionally large inventory shortages. As both prices and inventories become more balanced, affordability and availability will improve, creating better market conditions for both sellers and buyers.
The recovery has yet to make an impact on markets where prices are the same or lower than they were last year at this time. Representing 20 percent of realtor.com’s markets, these are located in the Midwest, South and Northeast, including Cleveland, Trenton, Hartford, Cincinnati and Buffalo. The impact of a weak economy continues to takes in toll in many of these markets but most have put in place the foundation for future growth. Both inventories and age of inventories are down compared to a year ago.
The recovery is having an extraordinary impact on the heartland. A number of major markets that didn’t suffer the brunt of the housing crisis nor face difficult local economic conditions had in an amazing buying season. Chicago, Boise, Portland OR, Minneapolis-St. Paul, Ann Arbor, Washington, DC, Nashville, Houston, Denver and Corpus Christie have all achieved price appreciation of 12 percent or higher over last year.
“Our September data on inventory counts, median list prices, and median time on market has shown another month of steady leveling, but the recovery certainly remains uneven in some pockets,” said Errol Samuelson, president of realtor.com®. “Some of the more industrial-based markets clearly continue to struggle, yet others are showing significant price gains over this time last year. While we are pleased to see a continued trend toward a healthy market balance, imminent economic factors could pose a significant threat to these improvements.”
The total U.S. for-sale inventory of single-family homes, condos, townhomes and co-ops declined slightly in September to a total of 1,944,018 units, down 1.68 percent from August.
However, after six consecutive months of steady growth, inventories are now just 2.04 percent lower than they were one year ago-a dramatic turnaround compared to earlier this year that signals a greater balance between demand and supply.
The median age of inventory rose slightly in September from 92 to 93 days, but is down by 10.58 percent on a year-over-year basis, suggesting that properties continue to turn over quickly, despite the end of the traditional home buying season. The median list price fell slightly in September, but remains 6.40 percent higher than it was one year ago.