The number of homes for sale in April inched 1.6 percent higher than in March, the first month-over-month inventory increase since June 2010, according to the April RE/MAX National Housing Report.
The months supply of homes for sale at April’s pace of sales was just 3.6 months, the lowest supply since the RE/MAX report began in August 2008. Closed transactions and median prices both remained 10 percent higher than last year’s levels, signs of a strong housing recovery in regions across the country. Low inventories contribute to a limited growth in sales, preventing some buyers from closing on the home of their choice.
“April was exactly what we needed at this time in the housing recovery. Home sales and prices continued to rise, while we started to see improvement in the number of homes for sale,” said Margaret Kelly, CEO of RE/MAX, LLC. “It may take a few months, but as prices rise and more homeowners gain positive equity, we should see an increase in the inventory of homes for sale, resulting in a much better selection for potential homebuyers.”
The April RE/MAX Housing Report showed an 8.1 percent increase in closed transactions over March and a 10.5 percent increase over sales in April 2012, making April the 22nd month in a row experiencing higher sales than the same month in the previous year. Real estate agents across the country are reporting increased traffic and expect the upcoming summer selling season to be even stronger than last summer. Of the 52 metro areas surveyed in April, 41 reported higher sales than April 2012, and 25 reported double-digit gains, including: Honolulu, HI +53.2 percent, Burlington, VT +40.3 percent, Albuquerque, NM +40.2 percent, Charlotte, NC +39.4 percent, Raleigh & Durham, NC +38.1 percent and Chicago, IL +33.4 percent.
The Median Price for all homes sold in April was $177,200, which was 4.7 percent higher than the median price in March and 10.7 percent higher than the price in April 2012. For 15 months in a row, the median price has been higher than in the same month of the previous year. Until the inventory balances, home prices should remain higher than those in the previous year. Of the 52 metro areas surveyed in April, four saw their median prices drop below last year’s price: Los Angeles, CA -9.1%, Albuquerque, NM -6.3 percent, Cleveland, OH -1.8 percent and Providence, RI -0.3 percent.
However, a total of 48 metros saw year-over-year price increases, with 21 reporting double-digit increases, including: Detroit, MI +44.1 percent, San Francisco, CA +42.2 percent, Atlanta, GA +38.9 percent, Las Vegas, NV +31.6 percent, Orlando, FL +24.6 percent and Phoenix, AZ +23.8 percent.
The average days on market for all homes sold in April was only 77. This is eight days lower than the 85 day average in March, and a significant 19 days below the 96 day average in April 2012. The 77 day April average is the 11th time in the past year that the days on market average has been below 90. A reduced days on market is the direct result of a market with low inventory and high demand. Days on market is the number of days between when a home is first listed in an MLS and when a sales contract is signed.
For the first time since June 2010, the number of homes for sale in April increased on a month-to-month basis, +1.6 percent from March. Also, the percentage drop on a year-to-year basis is the lowest annual drop in the last 12 months, 26.6 percent. It’s possible April marked a turning point for the nation’s inventory of homes for sale. Of the 52 metro areas in the April survey, only two reported a rise in overall inventory from last year: Manchester, NH +3.1 percent and Phoenix, AZ +1.0 percent. Extremely low months supply levels continue to be seen in cities like: San Francisco, CA 1.0, Denver, CO 1.2, Washington, DC 1.6, San Diego, CA 1.8, Seattle, WA 1.8, Boise, ID 1.8, Orlando, FL 2.1, Detroit, MI 2.1, and Houston, TX 2.2.
The RE/MAX National Housing Report is based on MLS data in approximately 52 metropolitan areas, includes all residential property types, and is not annualized. For maximum representation, many of the largest metro areas in the country are represented, and an attempt is made to include at least one metro from each state. Metro area definitions include the specific counties established by the U.S. Government’s Office of Management and Budget, with some exceptions.