Prices of properties listed for sale continued to fall in December, dropping in 16 of 20 major markets, while West Coast cities lead the charge.
According to a report from real estate research firms Altos Research
and Real IQ
, released late Wednesday, San Francisco saw average home prices drop 4.6 percent during the past three months, while Las Vegas, San Diego, Los Angeles and Detroit all registered price declines of over 3 percent.
Prices remained flat in two markets -- Dallas, with a +0.1 percent gain over three months, and Phoenix, with a -0.1 percent loss -- while three additional markets (Charlotte, New York, and Washington, DC) were not included in the price index for December due to a revision in data collection methodology.
The largest single-month declines occurred in San Francisco and San Diego, with prices dropping 2.6 percent and 2.1 percent between November and December.
Listing inventories decline, while DOM jumps
Time on market continued to increase in nearly every market tracked in the report, with Miami reporting the longest days-on-market (DOM) at 143 in December; Minneapolis and Detroit both registered 136 days on market. Portland has seen DOM increase by 48.2 percent over the course of three months, reaching 99 days in December.
â€œSellers continue to adjust their price expectations downward but not quickly enough to keep pace with declining demand,â€? said Stephen Bedikian, partner and research director for Real IQ. â€œUntil we see declines in both inventory levels and days-on-market, we won't have any confidence that supply and demand are balancing out.â€?
As DOM jumped, listing inventories declined in most markets -- with the exception of key markets in Florida, Tampa and Miami, which posted inventory increases of 10.5 percent and 4.0 percent respectively.
â€œDeclining inventory levels are essential to a recovery in the housing market,â€? said Michael Simonsen, CEO and co-founder of Altos Research.
â€œHowever, if the economy continues to slow or enters a recession, we may see inventories balloon again in the Spring and downward pricing pressure on sellers will intensify.â€?