US housing supply falls for 13 months in a row

San Francisco, United States

US housing supply fell by double-digits for the 13th month in a row in October, according to RE/MAX.

The agency saw its second highest level of sales of any October in nine years last month, continuing to drive down the inventory of houses for sale. Inventory declined in 48 of the 53 markets surveyed and the number of homes for sale was the lowest of any month since May 2016.

Despite this, sales were down 1 per cent on October 2015, which marked a record October. Sales dropped year-over-year in 28 of the 53 markets surveyed, including several New England markets. Nonetheless, the average Days on Market for homes sold in October was 58, up two days from the average in September 2016, but down four days from October 2015. October is the 43rd consecutive month with a Days on Market average of 80 or less.

As a result of the strong sales and falling supply levels, October’s median sales price increased by 8.3 per cent to $216,500. Driving the price increase was a double-digit increase in Florida and markets such as San Francisco and Denver, where supply is very limited.

Sales rose by the highest amount in Phoenix, Arizona (12.2 per cent), Seattle, Washington (7.7 per cent), and Nashville, Tennessee (6.9 per cent).

Dave Liniger, RE/MAX CEO, Chairman of the Board and Co-Founder, says, “Although October sales weren’t quite as robust as what we’ve tracked so far in 2016, it’s only the second month this year that didn’t exceed the strong levels set in 2015. But finishing just 1 percent below October 2015 sales is still a very solid performance.

“It’s the 13th consecutive month of double-digit decline in inventory year-over-year, and that appears to have pushed prices up in all but one market.”

 

California property sales climb, but homes aren’t getting more affordable

23rd November 2016

Bolstered by healthy sales activity in Southern California and the Central Valley, California existing home sales and median price gained ground in October on a month-to-month and year-over-year basis, according to the California Association of Realtors.

Existing, single-family home sales totaled 442,970 in October on a seasonally adjusted annualized rate, up 4.1 per cent from September and 8 per cent from October 2015. The statewide median home price was $513,520, up 1.2 per cent from September and up 7.3 per cent from October 2015

This is the seventh month in a row that the statewide median price has been above the $500,000 mark, with “little signs of slowing down”.

Indeed, rising wages and slightly lower interest rates did little to improve California’s housing affordability for local buyers in the third quarter of 2016. 31 per cent of California households could afford to purchase a median-priced home in the third quarter, unchanged from Q2 2016.

Homes were slightly more affordable in third-quarter 2016 compared to third-quarter 2015, when the affordability index stood at 29 and the median home price was $487,420.

As a result buyers are either competing less for homes, or switching their focus to the lower end of the market.

For the San Francisco Bay Area as a whole, for example, pending sales were 4.7 per cent lower in October than September and 11.6 per cent lower than October 2015, due to falling affordability and skyrocketing home prices. San Francisco, San Mateo, and Santa Clara counties all experienced significant annual declines in pending home sales of 21.2 per cent, 5 per cent, and 12.5 per cent respectively.

“With prices continuing to increase amid a low supply of homes for sale on the market, especially in the San Francisco Bay Area and coastal regions, home buyers are migrating toward lower-priced homes in more affordable inland areas,” says C.A.R. President Geoff McIntosh. “As a result, home prices at the lower end of the market have risen significantly in the past year, challenging an already depressed homeownership rate.”

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