Asking Home Prices Fall in July, While Inventory Growth Slows
An increasingly mixed real estate market got no clearer in its signaling during July, with a report released Monday morning finding evidence of continued pricing pressure -- but also finding that inventory levels have perhaps started to decrease in certain areas. The only question is what it all means. A composite index covering 10 major metropolitan areas in the U.S. found a decline in asking prices of 0.8 percent in July, and 1.3 percent over the past three months. Prices of properties listed for-sale fell in 13 of 26 major markets, according to the report jointly published by Altos Research and market analysis firm Real IQ. Asking prices fell at the fastest rate in Las Vegas -- down 4.0 percent during July -- and 7.5 percent over the most recent three-month period, for an annualized rate of 30 percent, according to the report. Surprisingly, listing prices rose at the fastest rate in Detroit, which saw asking prices rise 4.8 alone during July; Cleveland saw asking prices rise 2.7 percent. Prices were also up slightly in the Midwestern markets of Indianapolis and Minneapolis, according to the report. "While prices continue to fall in coastal and Western markets, prices appear to have stabilized in Midwestern markets that were previously declining," said Michael Simonsen, CEO and co-founder of Altos Research. "The real test will come in the fall when markets typically experience a seasonal slowdown which will be exacerbated by high job losses and foreclosures." Inventory trend improves After spiking in the past few months due to the traditional spring selling season, the Altos/Real IQ data found that listed property inventories actually declined in July. The 10-City Composite markets tracked by the firms showed a decrease of 2.0 percent, while inventory rose in just 6 of 26 markets -- with the biggest decreases occurring in Detroit and Cleveland, the same cities seeing a rise in asking prices. "Broadly declining inventory is a positive sign in the near-term, particularly for the Midwestern markets which all showed inventory declines," said Stephen Bedikian, partner and research director for Real IQ. The composite average days-on-market was 111 or the month, a slight increase from 109 DOM in June. Thirteen of 26 markets had an average days-on-market of 100 or more, Bedikian said. By far, the market with the slowest rate of inventory turnover was Miami at an average of 156 days-on-market, nearly a full month more than the next-slowest market (Tampa). As it has continued to do throughout the housing correction, Austin led all markets with the fastest rate of inventory turnover at an average of 78 days-on-market. "It's possible that we'll see a plateau confused with recovery," said one source, a bank executive that asked his name not be used for this story. "I'd love to think we can turn this around in just one year, but the truth is that real estate downturns last four to six. "I think investors are moving in some of the hardest-hit areas, which will push up asking prices in the short run only," said the source. "And I think that REO is piling up, whether or not it's being listed right away." Which brings up back to our opening statement: the only question is what all of data really means. Right now, it's clear that the best answer is "anyone's guess." For more information, visit http://www.altosresearch.com and http://www.realiq.com.