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How is home price growth pushing sellers to market?

Realtor inventories grow just in time for spring buying season

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Homeowners are responding to home price gains by increasingly putting their homes on the market, setting a pace that outstrips the pace this time last year, according to data from Realtor.com.

Sellers are hoping it will be a busy home-buying spring season as the number of properties for sale in February rose 10.1% above February 2013 levels, to 1,744,032 units.

Prices are up, too. The median list price at $199,000 increased 7.6% compared to the same month last year, and the median age of inventory increased 6.5% above year-ago figures, to 114 days.

“Overall these figures indicate a continued reinforcement of steady gains and market stabilization that we’ve been watching since late last summer,” said Steve Berkowitz, CEO of Move. “Seller confidence is the factor to watch as we head into the spring home-buying season, and these are very encouraging indicators – not only are more homes coming onto the market, but typically we don’t see a rise in asking prices this early into the year.”

The gains in home prices have freed many homeowners underwater, though in several markets owners aren’t out of the water yet. Sellers otherwise holding off on changing their housing — due to family growth, empty nests, or geographically relocating — are able to make a move. 

Inventories are still extremely low, and this remains a key factor to watch for the long term.

The National Association of Realtors says that while ongoing inventory shortages continue to lift prices, the supply of existing home inventory, standing at 2 million listings, has been hovering around a 13-year low, while new home inventory, standing at 180,000 listings, is at a 50-year low. 

NAR projects housing price appreciation of 5-6% -- only slightly above other projections that range from 2% on the low end to 4% on average.  

 

February 2014

Year-over-Year Percentage Change

Month-over-Month Percentage Change

Number of Listings

1,744,032

10.1%

4.3%

Median Age of Inventory

114 days

6.5%

-0.9%

Median List Price

$199,000

7.6%

2.1%

(Chart: Realtor.com)

Inventories in February were 10.1% higher than they were one year ago. In 99 of the 146 markets that Realtor.com tracks, there were year-over-year gains in inventory in February.

Of those, 63 markets rose by 10% or more. The added supply does not appear to be impacting price gains; just eight markets of those with inventory gains registered declines in median list price year over year, none greater than 6.1%.

Despite the increase in inventory, the median list price jumped by more than 2% in February to $199,000, 7.6% higher than it was one year ago.

Of the 121 markets that posted year-on-year gains in median list price in February, 84 markets rose less than 10%.    

The median age of inventory gained 6.5% in February compared to year-ago levels, to 114 days. 

California markets became overheated last spring but inventories have bounced back.

Denver and Chicago are relatively strong markets whose median list prices are up on a year-over-year basis by 19.6% and 14.3%, respectively.

Weak markets still persist. List prices in 14 markets dropped by more than 1% in February, typically in older, industrialized areas such as Shreveport, Rochester and Omaha.

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