As nationwide inventory shortages continue to drive up housing prices and cause bidding wars, the housing market is starting to see a quiet turnaround — but mainly in more expensive cities, and among higher-end homes, according to new figures from News Corp’s home search portal realtor.com.
The inventory of homes worth below $200,000 is down 15.6 percent nationally, but is up 5.7 percent for homes that cost more than $350,000, according to realtor.com’s July inventory report.
This month, the average listing price for a single-family home remained $299,000, the same as June and 9 percent higher than it was in July 2017. After getting listed, the average house is sold within 59 days — five days sooner than it sold at the same time last year.
“July inventory growth is in high-priced, competitive markets, and often at the pricier end of these markets,” said Danielle Hale, chief economist for realtor.com, in a statement.
Throughout 2017, inventory shortages have caused a drop in home sales and bidding wars in which houses sometimes sold for over $100,000 above the asking price. According to realtor.com, the number of houses on the market is not yet in the upswing — although, a slowing decline (4 percent from July 2017 compared to 8 percent year-over-year) could indicate that we may soon start to see increased recovery.
But along with the price of the house, the number of new listings also varies greatly by geographical location — San Jose, California; Seattle, Washington; and Providence, Rhode Island, all saw an inventory increase of more than 20 percent. Out of 45 of the largest metropolitan areas in the country, 16 saw growth from 2017.
“It’s not just California markets that have seen an increase in inventory, markets on both coasts and in the South reported inventory increases in July,” Hale said.
While such news is encouraging for homebuyers dismayed by the low number of houses they can buy, it is still too early to tell whether inventory growth in some pockets of the country will lead to a full-scale turnaround in sales — especially as house prices are expected to grow another 5.1 percent in 2019.
“Although signs of an inventory turnaround are encouraging, whether they mean good news for buyers remains to be seen,” Hale said. “These areas are seeing more new listings and some construction growth, but high prices and fast-selling homes are causing some buyer hesitation which is reflected in fewer home sales.”