The July RE/MAX National Housing Report has followed the trend on an improving housing market since the start of 2012. The trend continued in July, as home sales were 10.3 percent higher than sales last July and year-over-year home sales have now risen for 13 consecutive months. Median home prices have now reached levels higher than the previous year for six months in a row, with an increase of 3.7 percent over July 2011. Inventory is now becoming a serious challenge to this recovering market, with available homes-for-sale falling 26.8 percent lower than the same month last year. Home sales could be much greater if more inventory was available, especially in the lower price range, where most sales are now occurring. With increased demand and shrinking inventory, the average Days on Market of homes sold in July was 82.
“It’s reassuring that both sales and prices continue to rise higher on a yearly basis, indicating that this housing recovery is real,” said Margaret Kelly, chief executive officer of RE/MAX LLC. “Overall, the picture is getting brighter each month, but what we need for a sustainable recovery is a turn-around in unemployment and better availability of mortgages, especially for higher priced homes.”
Home sales appear to have peaked in June, with July sales down 9.4 percent from that level, but still 10.3 percent above the number of sales in July 2011. July is the 13th consecutive month with sales higher than the same month in the previous year. With continuing mortgage rates at historic lows and the most attractive home prices in years, sellers and buyers are returning to this recovering market. Of the 53 metro areas surveyed, 44 saw higher sales than one year ago; 26 of those metro areas saw double digit increases, including: Providence, R.I. +38.1 percent; Albuquerque, N.M. +29.6 percent; Chicago, IL +29.5 percent; Boston, Mass. 25.7 percent; Nashville, Tenn. +25.4 percent; and Milwaukee, Wis. +25.1 percent.
The Median Sales Price of homes sold in July was $169,000. This price marks a 3.7 percent increase over the median of July 2011, but is off fractionally from prices seen in June, down 0.6 percent. The annual increase of 3.7 percent marks the sixth month in a row with year-over-year increases. Of the 53 metro areas surveyed for the July RE/MAX National Housing Report, an impressive 42 reported price increases over last year, with 12 metro areas experiencing double-digit gains, including: Phoenix, Ariz. +33.1 percent; Boise, Idaho +22.1 percent; San Francisco, Calif. +20.6 percent; Little Rock, Ark. +14.5 percent; Detroit, Mich. +14.1 percent; and Las Vegas +13.2 percent.
For all homes sold during the month of July, the average Days on Market was 82. This represents a drop of two days from the average in June and six days from July 2011. July represents the second month since September 2011 with a Days on Market below 90, and the lowest average since July 2010. The Days on Market average continues to fall in many markets due to low inventory. Days on Market is the number of days between first being listed in an MLS and when a sales contract is signed.
The inventory of homes-for-sale fell 5.4 percent from June and 26.8 percent from inventory levels seen in July 2011. Month-to-month inventories have now fallen for 25 consecutive months. A shrinking inventory is helping home prices rise, but may also be limiting sales. Given the current rate of sales, the average Months Supply is now 5.3, about two months lower than the 7.2 average seen in July 2011. Very low Months Supply continues to be seen in San Francisco, 1.2; Los Angeles, 1.8; Denver, Colo. 2.4; Orlando, Fla. 2.5; Phoenix, Ariz. and Miami, Fla. 3.1.
