After a prolonged stretch of low housing inventory (numbers of homes for sale), we are starting to see some relief for home buyers. There was a 3% increase in new listings in May ’14 compared to last May and an 8.3% increase in housing inventory. While many areas are still experiencing dramatic inventory challenges, the pendulum is starting to move toward a more balanced real estate market.
The low inventory levels, as well as a shift toward traditional sales (versus foreclosures & short sales); have continued to boost the median sales price which was $210,000 in May 2014. This is the highest monthly sales price since December 2007! May’s numbers also indicate 27 straight months of year-over-year price gains. Year to date the median sales price has increased 8.9% to $195,000.
While some stats make it appear we are in a bit of a lull make no mistake, the housing market is still extremely active. Pending sales were down 9% and closed sales were down 11.4% compared to May 2013. This should not be seen as a shift, but more of a pause from the red hot market of last summer. We are still well above the levels see in 2011 and 2012 and we expect that to continue through the summer of 2014.
I can’t overstate the impact that the shift from distressed properties (foreclosures & short sales) to traditional sales has had on our market in general, and prices in particular. For example, though new listings increased a modest 3% over last May, traditional new listing increased 14.1% while new foreclosure and short sale listings fell 44% and 47.7% respectively. The result has been more traditional buyers and less investors, and a natural increase in sales price.
With decreasing pending sales and increasing inventory, we are seeing of a more balanced local real estate market, but the seller is still usually in control. Many new listings are selling within weeks, if not days and multiple offers are common. More than ever, market dynamics are hyper-local with market conditions differing from block to block and neighborhood to neighborhood.
Thanks for reading, stay tuned.