Fewer Available Homes are Driving Up Prices

Realtor.com reports:

“Accelerating price growth pushed home prices into uncharted territory in July with the national average median home price reaching nearly $350,000, while inventory continued to evaporate and homes sold in an average of 60 days — the same as last year — according to realtor.com’s July Monthly Housing Trends report. Following the nation’s COVID trajectory, markets in the Northeast outperformed other regions of the U.S. in nearly every housing metric.

“National listing price growth continued as the summer homebuyer season was in full swing, increasing by 8.5 percent in July year-over-year. After prices stumbled in April, home prices have continued to accelerate each month since. July’s listing price growth of 8.5 percent marks the largest leap in median listing prices since November 2018 and equates to a $27,000 increase over last year.

“Of the nation’s 50 largest metros, 48 saw year-over-year gains in median listing prices in July, up from 46 last month. Only two of the 50 largest metros saw prices decline in July: Miami–Fort Lauderdale–West Palm Beach, Fla. (-1.5 percent); and Orlando–Kissimmee–Sanford, Fla. (-0.9 percent) — both areas severely hit by COVID during June and July.

“Nationally, homes are selling in an average of 60 days. This is a dramatic improvement over June when homes spent an additional 15 days on the market on average compared to the previous year.

“The Coronavirus has impacted every corner of the U.S., but it hasn’t hit every area equally or at the same time. The U.S. housing market performance is closely mirroring COVID’s path, which is providing clues into what we can expect for various housing markets in the months to come,’ said realtor.com’ Chief Economist, Danielle Hale. ‘After being particularly hard hit in March and April, new Coronavirus cases remain stable in the Northeast and we’re seeing buyers return to the market in force. If this same trend follows in the South and Midwest — where outbreaks continue to rise, we could see a flurry of activity well into the fall, especially as schools delay their openings.’

Homes now selling faster than last year in the Northeast

“Much of the days on market improvement is being driven from the Northeast, where properties are being scooped up six days faster than last year. Markets with the least time on market compared to last year included Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. (-13 days); Boston–Cambridge–Newton, Mass-N.H. (-12 days); and Hartford–West Hartford–East Hartford, Conn. (-12 days). At the same time, several large metro areas saw increases in time spent on the market, including Miami–Fort Lauderdale–West Palm Beach, FL (+24 days); Milwaukee–Waukesha–West Allis, WI (+8 days); and Los Angeles-Long Beach–Anaheim, CA (+8 days).

Inventory at all-time lows, but new listings trend improves compared to June

“The number of homes for-sale across the U.S. was down 33 percent, or 440,000 listings, compared to a year ago. July’s inventory decline is an acceleration from June when listings declined by 27.4 percent.

“Within the nation’s 50 largest metros, inventory declined by 34.8 percent year-over-year, an acceleration from June’s decline of 26.5 percent. In July, none of the 50 largest metros saw an inventory increase on a year-over-year basis and 45 of the 50 saw greater inventory declines than last month. Metros which saw the largest declines in inventory included Riverside–San Bernardino–Ontario, Calif. (-50.4 percent); Baltimore–Columbia–Towson, Md. (-48.7 percent); and Providence–Warwick, R.I.-Mass. (-47.4 percent).

“New listings were down 13.4 percent year-over-year, a significant improvement over April, when new listings were down 44.1 percent. Much like price growth and days on market, the nation’s inventory recovery is being led by the Northeast where new listings were down only 1.2 percent year-over-year. Throughout the rest of the country, new listings were down 10.0 percent in the West, 16.1 percent in the South, and 20.8 percent in the Midwest.”