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As the year's peak home buying season comes to a close, key market indicators point to a shift in the dynamics of the housing market, suggesting that future home value appreciations may likely be driven by market demand, rather than inventory shortages.

Turning Point for Housing Market?

As the year’s peak home buying season comes to a close, key market indicators point to a shift in the dynamics of the housing market, suggesting that future home value appreciations may likely be driven by market demand, rather than inventory shortages.

An analysis of the summer home buying season ending in August shows year-over-year changes now within the single-digits for three key indicators – inventory count, median age and median list price, signaling a leveling of the market not seen for some time. The national market was virtually flat month-over-month compared to July for both inventory and median list price, and registered a slight increase in median age of inventory.

“Where we have seen significant volatility in many markets, including double-digit declines in inventory as well as increases in median price for both yearly and monthly views, we are now looking at a housing market that is less heated and moving closer to normalcy,” said Steve Berkowitz, CEO of Move.

Realtor.com® Key National Market Indicators for August 2013


August 2013

Year-over-Year %

Change

Month-over-Month %

Change

Number of Listings

1,977,202

-2.50%

0.93%

Median Age of Inventory

92 days

-8.00%

8.24%

Median List Price

$199,900

6.39%

0.00%

National Highlights:

Widespread Inventory Recovery – The inventory recovery is broad and growing. The net number of listings increased even though the summer season is ending. Close to one-third of the 146 markets are within 5 percent of last year’s inventory levels, and more than two-thirds (99) of markets registered a net increase in inventory over last month.

Prices Stabilize – Despite the increase in inventories, the national median list price did not change compared to July. Absent a significant weakening in economic conditions or significantly higher rates, prices should continue to slowly rise alongside typical cost of living increases.

Price Appreciation Becoming More Widespread – In August, 123 of the 146 Metropolitan Statistical Areas (MSAs) covered by realtor.com® registered a year-over-year increase in their median list price, with 78 markets registering an increase of 5 percent or more. Of the 18 markets reporting a list price decline, only 11 markets had a year-over-year list price decline of one percent or more, and only three markets had a list price decline of 5 percent or more. By contrast, the number of markets reporting year over year median prices lower than they were last year was 31 in July.

Local Market Highlights:

Inventory – The following MSAs saw a significant decline in inventory:

Melbourne, Fla.: -30 percent

Sacramento, Calif.: -26 percent

Stockton, Calif.: -31 percent

Median Age – The median age of inventory increased across the board in 130 of 146 MSAs. The three biggest gainers were:

Oakland, Calif: +25 percent

Denver: +26 percent

Seattle: +25 percent

Median List Price – The nationwide median list price had no significant gains or losses, but the two markets of greatest change were:

Highest gain was 6.53 percent for Corpus Christi, Texas

Lowest decline was -8 percent for Jersey City, N.Y.

The majority of markets covered by realtor.com® appear to be ending the 2013 home buying season on a positive note, with more balanced inventories, shorter time on market, and higher listing prices compared to one year ago. However, some markets traditionally focused in the industrial sector continue to struggle due to weak local economies – examples include markets in the Carolinas, Philadelphia and New Jersey.

California markets continue to dominate the list of areas experiencing the largest year-over-year median list price increases, despite the surge in new property listings that has occurred in most of these areas. Detroit, Phoenix, Reno, Nev. and Las Vegas also continue to be among the nation’s top performers in terms of their year-over-year list price increases.

Many smaller industrialized markets in the Midwest and the Northeast continue to struggle, and several major Florida markets are showing signs of re-emerging weakness. This underscores the uneven nature of the housing recovery and its dependence on the strength of the local economy.

Realtor.com® regularly tracks real estate data and develops monthly reports featuring the number of listings, median age of inventory and median list price across the U.S. and in specific markets, as well as provides year-over-year and month-over-month changes. These reports are the only ones pulled directly from the realtor.com® database, where 90 percent of listings are updated every 15 minutes from more than 800 multiple listing services. For more information on Move, please visit www.move.com or one of its many online real estate properties including realtor.com® at www.realtor.com.

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