With real estate sales down significantly in most markets, it’s time for Realtors to create their own inventory.
On today’s Real Estate Podcast, from Real Estate Rockstars, Hyperfast Agent, Dan Lesniak, discusses low-cost, unconventional ways for real estate professionals to get listings. Hear where to find off-market deals, how to win business in any market, and get tools for succeeding with today’s sellers.
Hope for Buyers on the West Coast as San Francisco Bay Area, Seattle, Los Angeles, San Diego and Orange County End Year with Double-Digit, Year-over-Year Gains in For-Sale Homes
San Francisco, CA – Dec. 20, 2018 (PRNewswire) The number of homes for sale nationwide tumbled 4.6 percent year-over-year in the last three months of 2018 across all price categories, according to the latest Inventory and Price Watch Report from Trulia®, a home and neighborhood site for homebuyers and renters. This marks the ninth consecutive quarter of declining inventory; the last time inventory rose was in Q3 2016. However, there are signs of progress with the nation’s most expensive housing markets seeing large inventory gains.
Buyers Face Tighter Inventory and Worsening Affordability Heading Into 2019
The drop in inventory is largely driven by the premium home segment where the number of for-sale homes fell 7.8 percent year-over-year (YoY), followed by modest declines across starter (2.2 percent) and trade-up homes (1.5 percent). Meanwhile, affordability has worsened across all housing segments as tight inventory and slow wage growth continues to put upward pressure on home prices. Nationally, starter home prices rose the most, up 13.9 percent from the last year. As a result, a typical starter-home buyer must now spend 41 percent of their income on a monthly mortgage payment, up from 34.2 percent a year ago.
“After promising signs of slowing inventory declines last quarter, the news is mixed as we close out 2018,” said Cheryl Young, senior economist, Trulia. “While more sellers are listing homes in expensive West Coast markets, most homebuyers must still contend with tight inventory that’s down 24 percent from five years ago. Coupled with slow wage growth, prices continue to inch higher, worsening affordability within the starter home market and possibly putting homeownership out of reach for many first-time buyers.”
Starter and Trade-Up Home Inventory Surges in Pricey California Markets
Housing markets in the West experienced the nation’s largest inventory gains despite the large dip in supply. Among the 100 largest U.S. metros, six of the markets with the biggest surge in inventory from last year were in California, most notably in San Jose (66.6 percent), San Francisco (36.5 percent) and Oakland (29.2 percent). This surge in every market except New York was driven by growth in starter and trade-up homes. In fact, the number of starter and trade-up homes in San Jose almost doubled from a year ago.
Starter Home Affordability Continues to Worsen
Despite inventory gains in the most expensive housing markets, prices continue to rise and outpace wage growth – especially in the starter home category. This has further put homeownership out of reach for many first-time buyers. For example, a typical starter-home buyer in San Francisco where the median starter home lists for nearly $900,000, would need to spend an unrealistic 146.9 percent of their income to afford a home.
Methodology
The Trulia Inventory and Price Watch offers buyers and sellers deeper insight into the change in supply and affordability of homes, within three different segments of the market: starter homes, trade-up homes, and premium homes. Based on the for-sale homes listed on Trulia, this report calculates housing inventory within each segment nationally and in the 100 largest U.S. metros, from October 1 to December 1, 2018. For the full report and methodology, see here.
About Trulia
Trulia’s mission is to build a more neighborly world by helping you discover a place you’ll love to live. Homebuyers and renters use Trulia’s website and suite of mobile apps to get a deeper understanding of homes and neighborhoods across the U.S. through personalized recommendations, insights sourced straight from locals, and 34 neighborhood map overlays that offer details on commute, reported crime, schools, nearby businesses, and more. Founded in 2005, Trulia is based in San Francisco, and owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG). Trulia is a registered trademark of Trulia, LLC.
Media Contact:
pr@trulia.com
RE/MAX National Housing Report on October 2018 MLS Data from 53 Metro Areas
Denver, CO – Nov. 19, 2018 (PRNewswire) The third consecutive month of lower year-over-year home sales in October contributed to the first year-over-year inventory increase in a decade according to the RE/MAX National Housing Report for October 2018. Meanwhile, the Median Sales Price recorded one of its lowest increases of 2018.
The RE/MAX National Housing Report for October saw sales decline 4.6% from a year ago – compared to sales drops of 11.6% in September and 1.1% in August – and was the eighth month of 2018 to record lower sales than 2017.
As a result, inventory is slowly being replenished, with the number of homes for sale in October increasing 1.0% over October 2017. October 2018 was the first month to show a year-over-year increase in inventory since October 2008 when two and a half times as many homes were for sale. The Months Supply of Inventory is now 3.5, compared to 3.3 a year ago.
“The market continues to move toward equilibrium. The modest inventory increase is a much welcome sign for buyers,” said RE/MAX CEO Adam Contos. “Although home sales were down year-over-year, it’s encouraging to see the magnitude of the decline decrease from the sharp drop we witnessed in September. The trend of easing price increases remains and that’s also a positive.”
October’s Median Sales Price of $236,000 marked the 31st consecutive month of year-over-year price increases and was the highest October price in the 10-year history of the report. Even so, the 4.9% gain was the third-lowest year-over-year growth of 2018.
Days on Market of 48 was an October record for fewest days and compares to 51 days in October 2017.
“The imbalance that has defined this market for so long continues to moderate,” said Contos. “However, it will take some time to recalibrate. Rising prices and interest rates and tight inventory levels continue. Buyer and seller expectations still appear to be a bit mismatched suggesting a choppy market remains in place.”
Closed Transactions
Of the 53 metro areas surveyed in October 2018, the overall average number of home sales is up 4.3% compared to September 2018, and down 4.6% compared to October 2017. Fourteen of the 53 metro areas experienced an increase in sales year-over-year including, Birmingham, AL, +15.1%, Tampa, FL, +11.0%, Trenton, NJ, +10.5% and Orlando, FL at +9.8%.
Median Sales Price – Median of 53 metro median prices
In October 2018, the median of all 53 metro Median Sales Prices was $236,000, down 1.3% from September 2018 and up 4.9% from October 2017. Only five metro areas saw a year-over-year decrease in Median Sales Price including Honolulu, HI, -7.4%, Anchorage, AK, -6.9%, Birmingham, AL, -6.3%, and Des Moines, IA, -3.3%. Five metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, ID, +18.0%, Omaha, NE, +11.8%, San Francisco, CA, +10.8% and Richmond, VA, +10.3%.
Days on Market – Average of 53 metro areas
The average Days on Market for homes sold in October 2018 was 48, up two days from the average in September 2018, and down 3 days from the October 2017 average. The metro areas with the lowest Days on Market were Omaha, NE, at 21, San Francisco, CA, at 28, Wichita, KS, at 30, and a four-way tie at 31 in Indianapolis, IN, Cincinnati, OH, Nashville, TN and Boise, ID. The highest Days on Market averages were in Hartford, CT, at 87, Augusta, ME, and Miami, FL, at 84 and New York, NY, at 74. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Months Supply of Inventory – Average of 53 metro areas
The number of homes for sale in October 2018 was down 2.6% from September 2018 and up 1.0% from October 2017. Based on the rate of home sales in October, the Months Supply of Inventory decreased to 3.5 from 3.7 in September 2018, and increased compared to October 2017 at 3.3. A 6.0-months supply indicates a market balanced equally between buyers and sellers. In October 2018, all but Miami, FL, at 7.5, of 53 metro areas surveyed reported a months supply less than 6.0, which is typically considered a seller’s market. The markets with the lowest Months Supply of Inventory are with San Francisco, CA, at 1.7, Boise, ID, at 1.9, Denver, CO, at 2.0, Manchester, NH, at 2.1 and a three-way tie at 2.3 in Minneapolis, MN, Boston, MA and Raleigh-Durham, NC.
For specific data in this report or to request an interview, please contact newsroom@remax.com.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with over 120,000 agents in more than 100 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. Dedicated to innovation and change in the real estate industry, RE/MAX launched Motto Mortgage, a ground-breaking mortgage franchisor, in 2016 and acquired booj, a real estate technology company, in 2018. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.com. For the latest news about RE/MAX, please visit www.remax.com/newsroom.
Description
The RE/MAX National Housing Report is distributed each month on or about the 15th. The first Report was distributed in August 2008. The Report is based on MLS data in approximately 53 metropolitan areas, includes all residential property types, and is not annualized. For maximum representation, many of the largest metro areas in the country are represented, and an attempt is made to include at least one metro from each state. Metro area definitions include the specific counties established by the U.S. Government’s Office of Management and Budget, with some exceptions.
Definitions
Transactions are the total number of closed residential transactions during the given month. Months Supply of Inventory is the total number of residential properties listed for sale at the end of the month (current inventory) divided by the number of sales contracts signed (pended) during the month. Where “pended” data is unavailable, this calculation is made using closed transactions. Days on Market is the number of days that pass from the time a property is listed until the property goes under contract for all residential properties sold during the month. Median Sales Price is the median of the median sales prices in each of the metro areas included in the survey.
MLS data is provided by contracted data aggregators, RE/MAX brokerages and regional offices. While MLS data is believed to be accurate, it cannot be guaranteed. MLS data is constantly being updated, making any analysis a snapshot at a particular time. Every month the RE/MAX National Housing Report re-calculates the previous period’s data to ensure accuracy over time. All raw data remains the intellectual property of each local MLS organization.