As the spring home buying season transitions into summer, month-over-month inventories are rising faster than they were as sellers respond to price increases at a faster pace than earlier in the buying season. On a national basis, both list prices and Inventories rose in last month, according to Realtor.com’s May data.
Inventories have risen by about 25 percent since the beginning of the year, signaling a potential end to a sellers’ market and a greater balance between market supply and demand. The monthly increases in the for-sale inventory that took place in the past two months are among the highest observed since Realtor.com has been collecting these data.
In May the inventory deficit fell to 10.11 percent on a year-over-year basis. Realtor.com’s inventory (1,852,740) was larger in May than it has been in ten months.
“We are seeing large regional markets across the country leading the way to national recovery. These regions are acting as a microcosm for what’s slowly happening in the larger real estate market,” said Steve Berkowitz, chief executive officer of Move. “Overall, we’re seeing seller confidence beginning to respond to consumer demand. Nationally, there are more homes going on the market for a shorter amount of time. And this is happening in our hot markets on a much larger scale.”
The nationwide median list price rose to $199,000 in May, the highest level since mid-2009. On a year-over-year basis, the median list price was up by almost 5 percent. At the same time, the average age of the for-sale inventory dropped on both a monthly and year-over-year basis, reflecting a surge of new property listings.
The median age of the inventory fell to 79 days in May, down by 2.47 percent over the month and by 13.19 percent on a year-over-year basis. It’s the youngest median age of inventory ever reported by Realtor.com.
Super-heated markets are in the process of cooling down as a surge in recent listings is a greater balance between supply and demand. For example, the month-over-month median list price increase in the top 10 markets in the nation, which includes 7 California markets, dropped from an average of 7 percent in April to just 3 percent in May, while the size of their for-sale inventories rose by an average of 13 percent.
On a year-over-year basis, median list prices in May were up by 1 percent or more in 103 of the 146 MSAs covered by Realtor.com, and were up by 5 percent or more in 71 MSAs. Only 3 markets experienced a decline of more than 5 percent. These results represent a steady improvement since the beginning of the year, with an increasing number of markets registering increasingly larger list price gains.