March inventory was up year-over-year for the first time since 2010 last month, but the big story this month was all about prices. Across the 38 unique markets we look at for Movoto Real Estate’s monthly State of the Real Estate Market report, the median list price per square foot index was up 7.1 percent over where it was in March of 2013 to $186. Compared to March 2012, it is up a tremendous 23.2 percent.
Gains in the median list price per square foot index were also seen on a month-over-month basis. It increased by 2.2 percent between February and March, from $182 to $186. Over the same period in 2013, it increased by 3.5 percent, and grew by 2 percent between February and March of 2012.
Last month’s increase in the median list price per square foot index comes despite a year-over-year rise in inventory of 11.1 percent across the markets we survey. In fact, three Southern California markets—Long Beach, Los Angeles, and San Diego—saw their total inventories rise by between 33 and 88 percent year-over-year. This is somewhat putting the brakes on rising prices, something we expect to see continue in coming months.
Inventory is down significantly in Boston, Cleveland, and four Texas markets. We’ll go into more detail about that later in this report.
How This Report Is Made
When building Movoto’s monthly State of the Real Estate Market report, we look at 38 geographically diverse cities in order to determine total inventory levels and a median price per square foot index. In addition, we further break down this data on a month-over-month and year-over-year basis. The data used comes from each city’s Multiple Listing Service.
Median List Price Per Square Foot Index
The median list price per square foot index rose 7.1 percent in March when compared to the same month in 2013, from $174 to $186, a difference of $12. Out of the 38 markets we survey for this report, 34 saw year-over-year increases in median list price per square foot, two remained the same, and two saw slight decreases.
The three cities that saw the largest increase in median price per square foot index year-over-year were:
- Houston, TX: The median list price per square foot in this Texas market was up 24.7 percent year-over-year from $77 to $96, a gain of $19.
- Chicago, IL: Prices in the Windy City climbed from $143 in March 2013 to $173 last month, an increase of $30 or 21 percent.
- Minneapolis, MN: Between March 2013 and March 2014, the median list price per square foot in Minnesota’s largest market climbed $25 from $133 to $158, an increase of 18.8 percent.
Denver, CO and Colorado Springs, CO saw decreases in their list price per square foot of 0.5 percent and 8.1 percent, respectively.
Between February and March, the median list price per square foot index rose 2.2 percent from $182 to $186. This was double the 1.1 percent or $2 increase seen between January and February of this year, but less than the 3.5 percent increase between February and March of 2013.
Total Inventory Level
Total inventory was up by 11.1 percent in March compared to the same month in 2013, from 88,096 to 97,866, a difference of 9,770 properties. This is a stark contrast to the year-over-year loss of 29 percent between March of 2012 and 2013 across the 38 markets we survey for this report. This indicates to us that inventory bottomed out in early 2013, and that we should continue to see year-over-year inventory increases for the rest of 2014.
The three cities that saw the largest increase in year-over-year inventory for February were:
- Mesa, AZ: Inventory in this Arizona suburb was up an astounding 91.7 percent in March compared to the same time last year, from 1,000 to 1,917 housing units, an increase of 917.
- Phoenix, AZ: While not quite as considerable a rise as its suburb saw percentage-wise, this city had its inventory climb from 2,691 in March 2013 to 5,104 last month, a difference of 2,413 units or 89.7 percent.
- San Diego, CA: While San Francisco continues to see inventory drop, this Southern California coastal city saw its climb by 1,030 units or 88.2 percent in March compared to the previous year, from 1,168 to 2,198.
Boston, MA had yet another month of year-over-year inventory decline. It dipped from 1,036 units a year ago to 648 last month, a decrease 37.5 percent. That’s even more than its 31.7 percent drop in inventory between February 2013 and 2014. Cleveland, OH saw a 19.9 percent decrease in year-over-year inventory, while Dallas, TX, Houston, TX, Arlington, TX, and Fort Worth, TX witnessed inventory declines of 19.5, 18.4, 17.4, and 11.9 percent, respectively.
Inventory rose from 95,393 in February to 97,866 in March across the 38 markets we look at for this report, an increase of 2,473 units or 2.6 percent. In comparison, inventory increased by 0.9 percent from January to February of this year, and decreased by 1.2 percent between February and March of 2013.
While inventory has increased at a greater pace and is more available than this time last year, it still has a considerable ways to go before it reaches the level of even March 2012 when it stood at 124,808 units (26,942 or 21.6 percent more than it’s at today). As we remarked last month, we expect this gradual increase in inventory over time to continue placing downward pressure on the median price per square foot index for the foreseeable future, slowing the pace at which prices climb and new homes come onto the market compared to 2013.