U.S. Home Supply Drops as Demand Climbs, Realtor.com Says
The number of U.S. homes listed for sale fell 22 percent last month from a year earlier and asking prices gained 6.8 percent as more shoppers seek to buy, according to data from Realtor.com.
There were 1.78 million homes listed for sale in February with a median asking price of $188,000, according to a report by Realtor.com, which is the National Association of Realtors’ official website and operated by real estate data company Move Inc. (MOVE) The median time homes spent on market dropped 9.8 percent to 111 days, indicating properties are selling at a faster pace.
“All this suggests that the market is healthier,” Errol Samuelson, president of Realtor.com, said in an interview. “You’re seeing the contraction in inventory and you’re now going into a spring market where there’s more demand.”
Existing home sales rose in January to the fastest pace in 20 months as investors took advantage of a decline in prices and low mortgage rates boosted home affordability to record levels, the National Association of Realtors reported Feb. 22.
The inventory of homes on the market fell to a 6.1-month supply in January, the lowest since April 2006, when the U.S. housing market was nearing its peak, the Chicago-based Realtors group reported. The inventory had spiked to a 12.1-month supply in July 2010, when sales plunged after the expiration of federal homebuyer tax credits worth as much as $8,000.
U.S. homebuyers often step up searches during the second quarter as families try to plan relocations during their children’s summer vacation from school, said Samuelson, also chief revenue officer of Move.com.
Increase in Visitors
About 14 million unique visitors looked at Realtor.com in January, up 30 percent from a year earlier, Samuelson said. The number of website and mobile application visitors asking for more information on properties jumped about 60 percent, he said.
Not all causes of a shrinking inventory are positive, according to Samuelson. A slowdown in foreclosure filings last year reduced the number of bank-owned properties on the market and many homeowners aren’t selling because they would lose money, he said. More than 11 million homeowners have negative equity, or owe more than their houses are worth, according to a March 1 report by CoreLogic Inc.
Some of the areas hit hardest by foreclosures, such as Phoenix and Bakersfield, California, had the biggest declines in listings, according to Realtor.com.
Asking prices rose in 106 of 146 metropolitan areas tracked by the website. Chicago had the biggest decline in asking prices, with a 7.4 percent decrease, followed by Knoxville, Tennessee, and three California markets, Orange County, Sacramento and the Los Angeles-Long Beach area.
Homes in Oakland, California, spent a median 32 days on the market, the fewest of any city, followed by Denver; Bakersfield and Fresno, California; and Iowa City, Iowa.
“It’s very much a market-by-market story,” Samuelson said.
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