Recent reports and key housing market indicators are already showing the fulfillment of previous predictions. Across the nation, markets are becoming more about demand and less about supply.
California, the other traditionally in-demand markets of Las Vegas, Reno, and Phoenix, and recovery contender Detroit, are surging ahead with the highest increases in list prices and sales. As Realtor.com states, “This underscores the uneven nature of the housing recovery and its dependence on the strength of the local economy.” Housing market normalization is inseparably tied to economic recovery, and generates a feedback loop of each strengthening the other. Most markets across the nation fall into the middle category between the top movers and struggling low markets. The big picture is one of gradual stabilization in the economy and the housing market.
The start of the school year signals the end of the peak home buying season, and analysis of the summer’s reports show the roller coaster ride we’ve been on is also at an end. As Realtor.com reports, three of the “key [housing market] indicators – inventory count, median age and median list price [are] signaling a leveling of the market.”
Inventories are stabilizing. Shifting from the dramatic overage to the drastic shortage, the new mix of existing and new homes for sale are giving buyer’s more and better options, helping to generate moderate (i.e. sustainable) across-the -board price increases. The median age of inventory for July is 85 days, meaning the average time a home sits from listing to sale is less than three months, which is still pretty fast: only about 6% longer than the previous month while almost 17% lower than last year’s slow surplus. The median list price (nationwide) is just under $200,000, up 5.27% from last year. The average price increase is caused by small gains in hotter markets coupled with several more “negative” markets, markets that have been showing average price declines from the previous year, climbing back into the black.
The overall effect of this normalization is balance; something many real estate professionals have rarely seen. No big winners, no big losers, just the balanced interplay of buyers and sellers in a market that reflects fair value. New home construction is back on track in much of the country, providing a welcome economic boost in construction and materials jobs while providing the inventory options to meet buyer demands while still contributing to the stabilization of home values.