The trends of fewer closings and stabilizing inventory continued through September, punctuated by a surprisingly big 11.6 percent year-over-year drop in home sales, according to the latest RE/MAX National Housing Report. At the same time, the report posted a median sales price of $241,000, marking the 30th consecutive month of year-over-year price increases, and the highest September price in the 10-year history of the report.
Active inventory dropped for the 119th consecutive month, according to the report, and the decline of 4.7 percent from September 2017 was the smallest year-over-year decrease since August 2014. In addition, the September year-over-year inventory drop was the fifth consecutive month in 2018 to post single-digit percent declines, rather than the double-digit monthly drops consistently seen over the previous three years.
“The big drop in September closings catches your attention,” says Adam Contos, CEO of RE/MAX. “The market is clearly rebalancing as buyers and sellers continue to process the increasing interest rate environment and what that means to them. The slower drop in inventory—a visible trend for nearly half a year—further illustrates the ongoing shift toward market equilibrium, and that’s healthy in the long term.
“It’s a little surprising to see prices staying so strong, but it’s hardly shocking in such a tight market,” Contos says. “The headwinds of rising prices and interest rates amid already tight inventory levels have been crimping affordability and slowing sales for most of the year, but it varies by geography. In circumstances like these, where the market is tricky to navigate, both buyers and sellers can benefit by aligning themselves with a professional agent—a local expert who can cut through the noise and advocate on their behalf.”
Closed Transactions
Of the 54 metro areas surveyed in September 2018, the overall average number of home sales is down 1.1 percent compared to August 2018, and down 11.6 percent compared to September 2017. Six of the 54 metro areas experienced an increase in sales year-over-year, including Orlando, Fla., +17.2 percent, Tampa, Fla., +8.5 percent, Miami, Fla., +6.8 percent, and Birmingham, Ala., at +4 percent.
Median Sales Price
In September 2018, the median of all 54 metro median sales prices was $241,000, down 3.2 percent from August 2018 and up 5.6 percent from September 2017. Only three metro areas saw a year-over-year decrease in median sales price: Birmingham, Ala., -2.1 percent, Anchorage, Alaska, -2 percent, and Honolulu, Hawaii, -1.7 percent. Seven metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, Idaho, +17.9 percent, Manchester, N.H., +13.4 percent, and Salt Lake City, Utah, +11.9 percent.
Days on Market
The average days on market for homes sold in September 2018 was 46, up three days from the average in August 2018, and down three days from the September 2017 average. The metro areas with the lowest days on market were Omaha, Neb., at 19, San Francisco, Calif., at 26, Seattle, Wash., at 27, and five markets tied at 29: Denver, Colo., Cincinnati, Ohio, Indianapolis, Ind., Las Vegas, Nev., and Salt Lake City, Utah. The highest days on market averages were in Augusta, Maine, at 90, Burlington, Vt., at 87, Hartford, Conn., at 81, and Miami, Fla., at 79. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Months Supply of Inventory
The number of homes for sale in September 2018 was down 1 percent from August 2018 and down 4.7 percent from September 2017. Based on the rate of home sales in September, the months supply of inventory increased to 3.7 from 3.0 in August 2018, and increased compared to September 2017 at 3.6. A 6.0-months supply indicates a market balanced equally between buyers and sellers. In September 2018, all but two of the metro areas surveyed—Miami, Fla., at 8.0, and New York, N.Y., at 6.0—reported a months supply less than 6.0, which is typically considered a seller’s market. The markets with the lowest months supply of inventory are San Francisco, Calif., at 1.4, Boise, Idaho, at 1.6, Denver, Colo., at 1.7 and Salt Lake City, Utah, at 1.8.
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