RE/MAX: Inventory Poses Biggest Threat to 'Year of Recovery'
By: Tory Barringer
Looks like the dragon will have to step aside: 2012 is now “The Year of the Housing Recovery,” according to RE/MAX.
The real estate giant released its National Housing Report for August 2012 (covering July), showing that both sales and prices have posted year-over-year increases for most of 2012.
Home sales appear to have peaked year-to-date in June, with July’s sales falling 9.4 percent month-over-month. However, sales were up 10.3 percent from July 2011, marking the 13th consecutive month for year-over-year sales gains.
Of the 53 metro areas surveyed by RE/MAX, 44 reported higher sales than one year ago, and 26 of those areas posted double-digit increases.
The median sales price in July was $169,000, a 0.6 percent drop from June, but a 3.7 percent increase over July 2011. The increase marks the sixth straight month in which the median price outdid itself year-over-year.
Forty-two of the 53 metro areas surveyed reported price increases over last year, 12 of which showed double-digit gains.
“It’s reassuring that both sales and prices continue to rise higher on a yearly basis, indicating that this housing recovery is real,” said Margaret Kelly, RE/MAXCEO. “Overall, the picture is getting brighter each month, but what we need for a sustainable recovery is a turn-around in unemployment and better availability of mortgages, especially for higher priced homes.”
The average days on market for homes sold in July was 82, a 2-day drop from June and a 6-day drop year-over-year. July is only the second month since September 2011 with a days on market below 90 and is the lowest average since July 2010.
The drop in average days on market was attributed to low inventory. Inventory levels for July fell 5.4 percent from June and 26.8 percent from July 2011, marking the 25th consecutive month for shrinking month-to-month inventories.
Given the current rate of sales, RE/MAX calculated the average months supply to be about 5.3, two months lower than the average 7.2 in July 2011.
In the report, RE/MAX said falling inventory represents a major challenge to the recovery.
“Inventory is now becoming a serious challenge to this recovering market, with available homes-for-sale falling 26.8 percent lower than the same month last year. Home sales could be much greater if more inventory was available, especially in the lower price range, where most sales are now occurring.”
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