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26 HOUSING MARKET COOLS OFF AS INVENTORY SLOWS Housing indicators cooled off slightly in September, marking the annual start of what is typically a slower season for the market, according to a report from listings site Realtor.com. At the national level, Realtor.com reported the median age of September's housing stock was 90 days, four days longer than August's median age as home shoppers back off for the season. Compared to last year, however, September's median inventory age was down three days, indicating demand is still there. e number of listings that month was approximately 1.87 million, down 2.7 percent annually and 7.9 percent monthly. e decline compares to Redfin's latest analysis, which showed an unexpected bump in inventory from new listings. Redfin's data measures a narrower list of markets nationwide. As other market indicators have seen steady improvement, inventory has remained a consistent problem, with shortages across the country limiting buyers' options and pushing prices beyond affordability in some areas. According to the National Association of Realtors' latest existing- home sales report, the nation's housing stock sat at a 5.5-month supply in August, short of the six- to seven-month supply considered to be a balanced market. New homes were in even shorter supply at nearly five months. "To truly relieve the inventory shortage on a sustained basis, new home construction needs to rise by at least 50 percent from the current levels," said Lawrence Yun, chief economist for the National Association of Realtors. ough the market's pace has slowed nationally, Realtor.com found 12 major metros are still selling quickly, with each one seeing a median inventory age of less than two months. ose markets include a number of California metros— Oakland, San Jose, San Francisco, San Diego, and Los Angeles-Long Beach—as well as a handful of others around the country, including Denver, Seattle, Houston, Austin, Omaha, Melbourne, and Washington, D.C. ough largely spaced out geographically, those markets have a number of factors in common that are helping to drive their local housing markets: Notably, they feature the best opportunities for math and science professionals, and they're home to large baby boomer populations. As Realtor.com explains in its report, the first group tends to pull in a higher median income and brings enhanced buying power, while the second group is rapidly coming to an age when they have to make retirement-related housing decisions. "When we see homes moving quickly in a particular market, we expect the trend to be supported by signs of local health like growth in economic production and employment," said Jonathan Smoke, chief economist for Realtor.com. "is month, we also observed more out-of-the ordinary trends, including high proportions of math and science professionals, as well as baby boomers in each of the fast-moving markets. As the technology industry grows and aging baby boomers decide to make housing moves to support their retirement, we'll continue to see strong housing demand associated with these factors." REPORT: REO SALES ACCOUNT FOR MORE THAN HALF OF ALL-CASH TRANSACTIONS e sales of REO properties, or those repossessed by lenders, accounted for more than half of all-cash sales in the U.S. in July, according to transaction data recently released by CoreLogic. Overall, all-cash home sales slipped yet again in July, falling to their lowest share in nearly six years, according to CoreLogic. Home sales transacted entirely in cash ac- counted for 32.9 percent of total home sales in July, down from 35.9 percent year-over-year. It was the lowest cash sales share since August 2008, according to CoreLogic. By transaction type, REO sales continued to account for the majority of all-cash sales at 56.3 percent in July, CoreLogic reported. ey were followed by resales (32.4 percent), short sales (31.1 percent), and newly built homes (16 percent). While REO sales still account for more than half of cash transactions, REOs made up only 7.1 percent of total sales in July, meaning they made little impact on the overall cash sales share. "A trend to watch is the cash share of resales, which has fallen almost 15 percentage points from its peak cash share of 47.1 percent in February 2011," said Molly Boesel, senior economist at CoreLogic. "is category will determine the direction of cash sales going forward, since resales make up the largest share at 81 percent of all sales." Compared to June, cash sales were down only a tenth of a percentage point. CoreLogic says cash sales share comparisons should be made on a yearly basis due to the seasonal nature of the housing market. As of July, all-cash sales were still well above their pre-crisis average of 25 percent as traditional mortgage buyers still find it dif- ficult to get a foot into the market. Cash sales peaked at a share of 46.3 percent in January 2011. Florida continued to lead all other states, with 49.7 percent of sales transacted in cash in July. Sunshine State locals also topped the list of the biggest 100 metros for cash sales, led by West Palm Beach-Boca Raton-Delray Beach (57.9 percent), Cape Coral-Fort Myers (57.3 percent), and Miami-Miami Beach-Kendall (56.5 percent).

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