INVENTORY DECLINING AT A
SLOWER PACE
Home inventories continue to decline in
many markets across the country, but the pace of
those declines appears to be slowing, which may
in turn slow price appreciation in some markets,
according to Realtor.com, a San Jose, Californiabased real estate website operated by Move Inc.
"Dramatic national year-over-year inventory
declines have evaporated," Realtor.com said in
its National Housing Trend Report released last
month.
National housing inventory declined 5.24
percent year-over-year in July, which is a
significant slowdown from the 16.47 percent
year-over-year decline reported in January. At
the same time, the number of markets with
declining inventory annually decreased to 118 in
July, down from 125 markets in June.
Previously, many of the fastest inventory
declines were taking place in California markets,
but in July, California did not make any
appearances on Realtor.com's list of the top five
markets with the greatest inventory declines.
The markets making up this list included
Detroit; Boston; Denver; Honolulu; and Naples,
Florida. These markets demonstrated inventory
deterioration ranging from 23 to 30 percent.
The notable inventory declines in these markets
"suggests the beginning of a housing market
recovery process similar to what was observed in
Florida in 2011, and California in 2012 and 2013,"
according to Realtor.com.
The effect of the overall slowdown in
inventory decreases across the nation could very
well be a similar slowdown in price appreciation.
List prices, as observed by Realtor.com, increased
5.27 percent year-over-year in July.
"The recovery is entering a new phase where
inventory shortfalls are no longer the driving force
behind changes in housing prices in many markets,"
according to Steve Berkowitz, CEO of Move, Inc.
While inventory is on the decline in many
markets, inventory increases are starting to
show up in some markets. The five markets with
the greatest yearly inventory gains in July were
Riverside-San Bernardino; Dayton-Springfield,
Ohio; Atlanta; Sacramento; and Santa Fe.
The age of housing inventory across the
nation is declining. The median number of
days a home spent on the market decreased 16.7
percent from the previous year in July, though it
was up 6.25 percent month-over-month. Age of
inventory increased in just five markets.
The metro areas with the shortest number
of days on market were Oakland, California (20
days); Denver (31 days); Seattle-Bellevue-Everett
(36 days); San Jose, California (37 days); and
Detroit (41 days).
STAT INSIGHT
-41%
Contraction
in residential
construction jobs
between 2006 and
2011 as a result of
the housing bust.
Source: Fannie Mae
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