Housing Inventory Posts Record Increase as Declining Sales Extend to Sixth Month
A sixth consecutive month of declining home sales in January contributed to the largest year-over-year inventory increase in at least 10 years, according to a RE/MAX National Housing Report, which echoed similar findings by Zillow.
While year-over-year home sales dropped 11 percent – extending a streak that began in August – inventory grew year-over-year by an average of 6.4 percent across the report's 54 U.S. metro areas. January marked the fourth consecutive month of year-over-year inventory growth – further reversing a decade-long trend of shrinking inventory. December 2018's year-over-year inventory growth of 4. percent was the previous record in the report's 10-year history.
"The winter chill extended to the housing market in January, as home sales remained cool," said RE/MAX CEO Adam Contos. "The good news is that inventory levels in January continued to rise on a year-over-year basis, providing incremental improvement in what's been a multi-year shortage of for-sale homes. This is a positive for homebuyers, as the market continues to swing their way."
Meanwhile, according to a BuildFax report, authorizations for new single-family housing construction increased just 1.23 percent from December 2018 to January 2019, and January marked the third consecutive month for year-over-year decreases in authorizations, with a 3.48 percent drop.
The median sales price of $234,000 was a report record for January, increasing 4.6% over January 2018. But the rate of sales price increase was considerably less than the 6.7% posted from January 2017 to January 2018. December 2018 was the only month since January 2012 to show a year-over-year decline in median sales price.
Fifty-nine days on market was a record low for January sold listings – averaging one day less than the 60 posted in January 2018. January's 3.9-month supply of inventory was higher than the 3.4-month supply of January 2018.
"Underlying demand remains solid overall, as evidenced by widespread price increases," said Contos. "So the housing market, while not markedly busy in January, remains relatively healthy. Furthermore, with interest rates stabilizing and home-price increases slowing, the spring selling season shapes up to be as interesting as any we have seen in years."
Of the 54 metro areas surveyed in January 2019, the overall average number of home sales was down 26.1% compared to December 2018, and down 11.0% compared to January 2018. Only Billings, MT, experienced an increase in sales year-over-year, at +7.1%.
Median Sales Price – Median of 54 Metro Median Prices
In January 2019, the median of all 54 metro Median Sales Prices was $234,000, down 2.5% from December 2018, and up 4.6% from January 2018. Four metro areas saw a year-over-year decrease in Median Sales Price, including Anchorage, AK, at -3.9%, Pittsburgh, PA, at -2.0%, Trenton, NJ, at -1.5%, and Birmingham, AL, at -0.5%. Six metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Augusta, ME, at +12.1%, Las Vegas, NV, at +11.2%, and Wichita, KS at +10.5%.
Days on Market – Average of 54 Metro Areas
The average Days on Market for homes sold in January 2019 was 59, up four days from the average in December 2018, and down one day from the January 2018 average. The metro areas with the lowest Days on Market were Omaha, NE, at 32, Nashville, TN, at 41, and a three-way tie between Las Vegas, NV, Cincinnati, OH, and San Francisco, CA, at 43. The highest Days on Market averages were in Augusta, ME, at 100, Hartford, CT, at 94, and Anchorage, AK at 93. 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 – Average of 54 Metro Areas
The number of homes for sale in January 2019 was down 2.6% from December 2018 and up 6.4% from January 2018. Based on the rate of home sales in January, the Months Supply of Inventory decreased to 3.9 from 4.1 in December 2018, and increased compared to 3.4 in January 2018. A six-months supply indicates a market balanced equally between buyers and sellers. In January 2019, nine of the 54 metro areas surveyed reported a supply at or over six months, typically indicating a buyer's market, including Miami, FL, at 9.0 and Indianapolis, IN, at 8.6. Nine markets shared the lowest Months Supply of Inventory at 2.0.