The number of available homes on the market for January 2014 compared to January 2013 increased by 5.9 percent, the highest year-over-year percentage gain in the previous 11 months. This increase is good news for potential home buyers, as an increase in inventory can decrease competition and prices.
Just as inventory increased on a year-over-year basis, other data points are also in line with historical data. The median list price per square foot across the cities we track increased on both a year-over-year and month-over-month basis.
How This Report Is Made
In building Movoto Real Estate’s monthly State of the Real Estate Market report, we look at 38 geographically diverse cities in order to determine total inventory levels and median price per square foot index. In addition, we further break down this data on a year-over-year basis and month-over-month basis. The data used comes from each city’s Multiple Listing Service.
Across the 38 cities we track, the number of homes on the market increased by 5.9 percent on a year-over-year basis. In January 2013, there were 89,304 available housing units, while at the end of last month there were 94,561 available housing units. In other words, there was an increase of 5,257 homes.
This is the largest increase in inventory in the past 11 months. During this time, inventory levels on a year-over-year basis increased three times. The largest year-over-year increase in inventory prior to this occurred between November 2012 and November 2013, when inventory rose 4.5 percent. This increase in the number of available units stems from more homes going on the market in Nevada, Southern California, and Florida, some of the places that were hit hardest during the recession.
On an individual basis, 20 cities witnessed an increase in available properties. The cities with the greatest increase in inventory when compared to this time last year were:
- Las Vegas, NV: The number of available units in Sin City skyrocketed in the past year, shooting from 3,237 homes in January 2013 to 6,245 homes at the end of January 2014. This is a 92.9 percent increase in inventory.
- Sacramento, CA: While Sacramento didn’t top Las Vegas, the city did see a major jump in available homes. In a 12-month timeframe, the number of homes in Sacramento increased by 82 percent. Inventory leapt by 638 homes, going from 778 in January 2013 to 1,416 at the end of last month.
- Mesa, AZ: The number of available homes in Mesa increased by 57 percent, adding 692 units. Inventory in Mesa over the 12-month period increased from 1,213 homes to 1,905 homes.
It’s not all good news, however. Eighteen cities lost inventory, 11 of which were double digit declines. The cities that saw the largest drop in inventory on a percentage basis were:
- Austin, TX: In the past year, it’s become more difficult to purchase a home in Austin. Compared to the same time in 2013, there are 20.5 percent fewer homes on the market. In January 2013 there were 1,974 homes on the market, while in January 2014 there were 2,050 homes on the market.
- Dallas: The number of available units in Dallas dropped by 22.4 percent over the 12-month period we tracked. In December 2013 there were 2,643 homes on the market, while in January 2014 there were 2,050 homes on the market.
- Boston: When compared to the same time in 2013, there are a 26 percent fewer homes on the market. The number of homes on the market decreased from 726 to 537. A decrease in inventory such as this helps explain the increase in area’s listing prices.
The inventory level across the cities we track dropped slightly between December 2013 and January 2014. As 2013 came to a close, there were 96,495 homes available; this figure dropped to 94,561 at the end of last month. The loss of 1,934 is about a 2 percent decrease.
This decrease in inventory is in line with the previous two years. From December 2012 to January 2013, the number of homes for sale dropped by 3.7 percent, while from December 2011 to January 2012 this figured dipped by about 2.5 percent.
Median List Price Per Square Foot
In the 12-month period between January 2013 and January 2014, the estimated list price of a home in the markets we track increased by 10.9 percent. Homes increased in estimated value from $162 to $180. This increase is in line with past data. Throughout 2013, the median list price per square foot increased during each month on a year-over-year basis. If last year’s trends hold true, inventory on a year-over-year basis will increase into the warm months.
On an individual basis, there was an increase in the median list price per square foot for 35 of the 38 cities we track, 18 of which were in the double-digit figures. In contrast, just three cities witnessed a decrease in estimated median list price per square foot. The three cities that had the largest increase in the median list price per square foot were:
- Boston, MA: A home in Beantown will cost potential home buyers 22.9 percent more compared to last year, according to our index. In January 2013, the median list price per square foot for a home in the city was $389; this increased to $478 a year later.
- Minneapolis, MN: Homes in this Minnesota city jumped in price by 19.5 percent, going from $118 to $141.
- Austin,TX: The increase in Austin’s median list price per square foot is likely linked with the city’s decline in inventory, which we discuss below. In a 12-month period, the estimated value for a home increased from $161 to $191 per square foot. This is a 18.6 percent increase in estimated value.
The three cities that saw a decrease in estimated value were Denver, CO, Cleveland, OH, and Colorado Springs, CO. Homes in Colorado Springs saw the largest decline in estimated value. A home in the area decreased in estimated value by 4.3 percent during the 12-month period, dropping from $116 to $111 per square foot.
The median list price per square foot index across the cities we track increased by $4 on a month over month basis. In December 2013, homes were valued at $176 per square foot and are now estimated at $180 per square foot.
According to our data, during the past four years the median list price per square foot has remained steady from December to January. In two of the past four years, prices have dipped slightly, while in the other two years prices increased slightly.
This year’s increase in the median list price per square foot, however, follows a pattern similar to the period from December 2012 to January 2013. In December 2012, homes were valued at $159 per square foot and increased to $162 per square foot in January 2012.