Fall is here—and so is the inventory. While uncharacteristic for this season, Movoto Real Estate’s latest State of the Real Estate Market report confirms that inventory is up nationwide for the fifth straight month, nearly to the level it had attained in September 2012. There were 105,726 homes on the market in September, as opposed to 101,086 in August, an increase of 4.6 percent.
As we noted in last month’s report, this increase is not ordinary following the traditionally more active home buying months of the summer. In fact, inventory has been on a steady climb all summer, the first time it has seen a sustained increase since beginning a consistently downward trend in the fall of 2010.
Given this data, we anticipate year-over-year inventory to enter into positive territory in October—the first time it has done this in 2013. Thirteen of the 38 markets we survey actually saw a year-over-year increase in inventory this September as compared to September 2012.
While inventory is up, the median list price per square foot has been more or less flat month-over-month at $180, up only $1 or 0.6 percent from August. Sellers are so far holding firm on their pricing strategies as we enter the slower months for home buying, and are likely expecting to see higher sale prices than we encountered last fall. This is due to the fact that the year-over-year median list price per square foot was up 12.6 percent from $160 to $180.
How This Report Is Made
In building Movoto’s monthly State of the Real Estate Market report, we look at 38 geographically diverse cities in order to determine average inventory levels and price per square foot. 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.
List Price Per Square Foot
Compared to September 2012, the median list price per square foot for September 2013 was up 12.6 percent, from $160 to $180. Increases in the price per square foot were seen in 35 of the 38 cities we survey.
The three cities that saw the largest increase in price per square foot year-over-year were:
- Phoenix, AZ: For the second straight month, Phoenix lead increases in year-over-year median list price per square foot. It was at $123 in September, compared to $94 during the same month in 2012, an increase of 30.9 percent.
- Long Beach, CA: Prices per square foot were up by 26.2 percent in September to $353, compared to $279 in September 2012.
- Sacramento, CA: California’s capital saw a per-square-foot price increase of 23.4 percent last month to $153. The same time last year it was at $124.
Colorado Springs, CO, Denver, CO, and Cleveland, OH all saw their median list price per square foot fall in September as compared to the same month in 2012, at 2.7, 3.1, and 8.2 percent, respectively.
After dipping by 1.1 percent between July and August, the median list price per square foot kept more or less steady between August and September at $180, an increase of only $1 or 0.6 percent from the previous month’s $179. By comparison, the list price per square foot increased by 1.3 percent between August and September of 2012, from $158 to $160.
Total Inventory Level
Total inventory remains down overall on a year-over-year basis between September 2012 and September 2013, with 25 of the 38 cities we survey showing decreases. This is slightly better than last month, where 27 of the 38 cities were down year-over-year. 105,726 homes were for sale last month, compared to 109,855 during the same month last year, a decrease of 3.8 percent. The year-over-year decrease from August 2012 to August 2013 was 11.2 percent, so the situation is clearly improving.
The three cities that saw the largest decrease in inventory year-over-year for September were:
- Boston, MA: Beantown had 881 homes on the market last month compared to 1,277 in September 2012, a decrease of 31 percent.
- Dallas, TX: There were 2,612 homes for sale in Dallas last month; in September 2012 there were 3,429. That’s a decrease of 23.8 percent.
- Houston, TX: The second largest drop in inventory for a Texas metro went to Houston, which had 6,287 houses on the market last month compared to 8,214 during the same month last year, a 23.5 percent decrease.
Las Vegas, NV lead the pack in terms of an increase in inventory, up a whopping 58.5 percent in September 2013 versus September 2012, from 3,685 homes to 5,839. That’s an increase of 2,154 homes on the market compared to last year.
Total inventory was up 4.6 percent from August to September with 105,726 homes on the market as opposed to 101,086 the month before. This marks the fifth straight month-over-month increase in inventory, a trend that began in April and we predict will steadily continue as the market normalizes.
Inventory has not increased on a month-over-month basis between the months of August and September since 2010. At that time, it increased by 3.2 percent, meaning that last month’s gain over this August was almost double that, and inventory is climbing more steadily than it did in the summer and fall of 2010.
In addition, the increased interest rates of July and August didn’t stop the median list price from increasing. Plus, now that the FED has announced that it won’t taper its bond purchases, interest rates have fallen. This leads us to believe that prices still have room to increase over the next several months.
The continued climb of listing prices should continue to bring sellers into the market, and we expect to soon see inventory increase on a year-over-year basis for the first time in more than 20 months.