Riding two trends—declining sales and growing inventory—the U.S. housing market continued to transition from a seller’s market to a buyer’s market in February, according to the latest RE/MAX National Housing Report.
“Trends of five months or more often indicate significant shifts, and the year-over-year trends in declining sales and rising inventory have both reached that length now,” says Adam Contos, CEO of RE/MAX. “It’s interesting to see the slowing sales and growing inventories that benefit buyers and at the same time the record prices that benefit sellers. The big picture supports an ongoing return to more balanced conditions.
“The next few months will determine whether the shift brings a wave of buyers into the market for the spring selling season,” Contos says. “Members of our network are reporting high local demand along with a need for even more inventory. The optimism for a solid spring exists—and a more balanced market certainly contributes to it.”
Closed Transactions
Of the 54 metro areas surveyed in Feb. 2019, the overall average number of home sales is up 10.2 percent compared to Jan. 2019, and down 4.2 percent compared to Feb. 2018. Leading the month-over-month sales percentage increase were Houston, Texas, at +28.8 percent, Birmingham, Ala., at +26.7 percent, and Raleigh-Durham, N.C., at 26.5 percent.
Median Sales Price
In Feb. 2019, the median of all 54 metro median sales prices was $240,000, up 2.2 percent from Jan. 2019, and up 5.5 percent from Feb. 2018. Nine metro areas saw a year-over-year decrease in median sales price, including Birmingham, Ala., at -4.2 percent, Hartford, Conn., at -4.0 percent, and Anchorage, Alaska, at -3.9 percent. Four metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, Idaho, at +16.0 percent, Cincinnati, Ohio, at +13.2 percent, and Wilmington/Dover, Del., at +12.6 percent.
Days on Market
The average days on market for homes sold in Feb. 2019 was 63, up four days from the average in Jan. 2019, and up one day from the Feb. 2018 average. The metro areas with the lowest days on market were Omaha, Neb., at 34, San Francisco, Calif., at 37, and a two-way tie between Denver, Colo., and San Diego, Calif., at 42. The highest days on market averages were in Augusta, Maine, at 120, Trenton, N.J., at 113, and Hartford, Conn., at 96. 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 Feb. 2019 was down 1.4 percent from Jan. 2019 and up 5.8 percent from Feb. 2018. Based on the rate of home sales in Feb. 2019, the months supply of inventory decreased to 3.4 from 3.9 in Jan. 2019, and increased compared to 3.1 in Feb. 2018. A six months supply indicates a market balanced equally between buyers and sellers. In Feb. 2019, five of the 54 metro areas surveyed reported a months supply at or over six months, including Miami, Fla., at 7.6 and Indianapolis, Ind., at 7.4, which is typically considered a buyer’s market. The markets with the lowest months supply of inventory were Denver, Colo., at 1.4 and San Francisco, Calif., at 1.6.
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