HousingPulse: Hot Markets Drove Sales-to-Price Ratio Up in June

Limited inventory and increased competition helped push June's average home sales-to-listing price ratio above 95 percent, according to the ""Campbell/Inside Mortgage Finance HousingPulse Tracking Survey"":http://www.insidemortgagefinance.com/housing_pulse/.

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The survey found that the average sales-to-listing price ratio hit 95.6 percent in June, the first time in nearly three years the ratio has been so high. HousingPulse attributed the boost to increased competition for the falling inventory of non-distressed property listings, as well as particularly strong home purchase activity in three states.

""Strong demand, particularly in areas of California, Arizona, and Nevada, are pushing up home prices very quickly in the short term,"" said Thomas Popik, research director for Campbell Surveys and chief analyst for HousingPulse. ""And because many of the home purchases in these areas are cash transactions, there appears to be less braking of prices by our current appraisal system than seen in other parts of the country. This trend raises the distinct possibility of housing price bubbles emerging in some of these hot housing markets.""

In addition, both average time on market and average sales price for non-distressed properties showed strong improvements. Time on market for non-distressed listings fell to 11.7 weeks, down from 12.7 weeks in May and the lowest recorded time on market in more than two years.

Average sales price for non-distressed properties rose 1.4 percent to $260,000 (from $257,000 in May).

Real estate agents who responded to the survey said they believe that closed sales prices would have increased more if not for rigorous appraisal standards that require comparables from distressed properties.

Property prices increased faster in markets with higher proportions of cash sales. HousingPulse found that sales-to-list price ratios in western regions of California, Arizona, and Nevada-where cash sales make up a higher share of the market-exceeded all other areas of the country.