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With five months behind us, 2013 is shaping up to be the year of low inventory and increased home values. This should come as no surprise to anyone who has kept up with the recent housing news.
According to our analysis, the list price per square foot increased across the cities we cover on both a year-over-year basis and a month-over-month basis, though only slightly in the case of the latter. At the same time, the total number of homes on the market decreased on a year-over-year basis, but increased modestly on a month-over-month basis.
Our analysis indicates that, across the housing markets we cover, the majority of areas are primed for sellers. The combination of low inventory and high demand has caused home prices to increase. As the home buying season (typically the warmer months of the year) continues, house hunters might face greater competition from each other, which has the potential to further increase sale prices. This is not unusual, as the housing market is seasonal. Still, home prices are rising very quickly, and reaching heights that haven’t been seen since 2010.
Movoto’s State of the Market report tracks data from 38 geographically diverse cities across the country. We calculate both the list price per square foot and total inventory based on raw data from the Multiple Listing Service. Below is a detailed breakdown of both our indexes.
List Price Per Square Foot
Year-Over-Year
In the past year, the median list price per square foot for homes in the cities we cover increased by 15 percent, a large amount considering that even a 3 to 5 percent increase is favorable. According to our index, homes cost $156 per square foot in May 2012. This figure rose to $179 per square foot in May 2013.
Index Breakdown
Of the 38 cities we cover, 33 saw an increase in the list price per square foot. The cities that saw the largest increases were:
- Sacramento: In the past year, the price per square foot in Sacramento jumped from $89 to $150. This is a 68.5 percent increase. Additionally, it is the largest increase in any city’s year-over-year price by a significant amount.
- Phoenix: The price per square foot of a home in Phoenix increased from $85 to $127, or 49.4 percent.
- Oakland: Homes on the already expensive Oakland market increased from $213 to $304 per square foot. This is a 42.7 percent increase.
While the increase in the price per square foot is beneficial for home sellers, home buyers are more interested in decreases in price. Of the five cities that saw a decrease in list price, Chicago saw the largest drop. The average list price per square foot in Chicago dropped from $164 in May 2012 to $145 in May 2013. This is a decrease of 11.6 percent.
Month-Over-Month
On a month-over-month basis, the list price per square foot saw a modest increase. In April, our index showed homes were listed at $177 per square foot. In May, this number increased to $179. The increase, though slight, marks the fifth straight month that the median list price per square foot has increased. In general, the increase is in keeping with seasonal trends. During the same time period in 2012, home prices increased from $153 to $156. Two years ago the price increased from $153 to $154.
Total Inventory Level
Year-Over-Year
The total number of homes on the market in the areas we cover dropped significantly in the past year by almost 23 percent. In May 2012, there were 118,061 homes on the market. A year later there were 91,066 homes available. This is a loss of 26,995 homes, or 22.9 percent.
Index Breakdown
Of the 38 cities we track, 33 saw a decrease in inventory levels. The cities that saw the largest decreases in the past year were:
- Sacramento: There were 1,549 fewer homes on the market in May than during the same time a year ago. In May 2012, Sac-Town had 2,553 homes on the market. A year later there were 1,004 homes. This is a staggering 60.7 percent decrease.
- Boston:The total number of homes on the market in Boston dropped by 52.6 percent. In May 2012 there were 1,691 homes on the market. Twelve months later there were 802 homes available. This is a decrease of 889 homes.
- Detroit: In the past year, the Detroit area has seen a decline in inventory to the tune of 44.6 percent. In May 2012 there were 3,168 homes available. A year later there were 1,756 homes available. This is a decline of 1,412 homes.
While most cities on our list saw a decrease in inventory, there was a bright spot. In the past year Phoenix witnessed a significant increase in homes. In May 2013 there were 35.2 percent more homes on the market than there were in May 2012. A year ago there were 2,083 homes on the Phoenix market; this number increased to 2,816 homes. This is an increase of 733 homes.
Month-Over-Month
Inventory on a month-over-month basis increased from 85,664 homes in April to 91,066 in May. This is an increase of 5,402 homes, or about 6.3 percent. Since December, inventory across the markets we cover has remained somewhat flat, and significantly lower than in the previous three years.
