In case you’re still a nonbeliever that housing has finally crawled its way into recovery mode, ask yourself: What are the bellwether indicators of the early stages of a rebound? You can probably rattle them off.
- Rising home prices in the vast majority of the country’s major markets.
- Tightening of the supply of houses listed for sale.
- Quickening rates of turnover of the available housing inventory – how fast houses listed for sale are put under contract
You could also add sustained periods of rising single-family housing starts (they were up in June for the fourth straight month), increased number of applications for home mortgages and more pending home sale contracts. All positive.
But let’s stick with the three key indicators bulleted above – prices, inventory and time on the market – because at the moment they are eye-openers. Though there are regional and local pockets where prices haven’t stabilized – notably in Pennsylvania, portions of New Jersey and the
In 99 percent (144) of the 146 major markets tracked by Realtor.com, which has access to listing and sales data from hundreds of Multiple Listing Services around the country, median prices rose during the month of June by 2.7 percent over year-earlier levels. Twelve months ago, by contrast, the same survey found prices declined by more than 1 percent in the majority (54 percent) of markets – 79 out of 146.
What’s more significant, however, is what’s happening to local inventories of houses for sale. They are plunging, and what’s on the market is generally moving quickly. On a national basis, the available stock of listings, i.e. what’s available for shoppers to buy, is down by 19.4 percent compared with the year before. But in 17 large metropolitan areas, inventory is down by more than 30 percent. In Oakland, California, for instance, there are 58 percent fewer homes listed for sale than 12 months ago. In Seattle, inventory is 43 percent lower. In San Francisco and Phoenix, the drop has been just under 40 percent. The median age of the national inventory – 84 days – is the lowest it’s been since early 2007, which means what’s getting listed isn’t sticking around nearly as long as it did a few years back.
These are extraordinary numbers, and in some cases they are helping to fuel multiple bidding situations on the remaining stock of houses available for sale. A handful of metropolitan areas that were badly battered during the bust are now reporting double digit listing price increases. Phoenix’s median list price is up 32 percent year-over-year. Miami is up 14 percent. Detroit – yesDetroit – is up 10 percent.
But big rebounds in median prices aren’t limited just to localities with low home costs and lots of foreclosures. Three of the highest costing markets in the U.S. have experienced robust increases from June of last year through this June: San Francisco’s median is back up to $725,000, a 15 percent-plus gain.Washington, D.C.’s median of $425,000 is up 13.6 percent. And Santa Barbara, California, is simply off the charts, with prices one-third higher than they were 12 months ago.
Boom is a bad word in real estate these days, so let’s not apply it to any of these situations. But rebound or modest recovery? Those terms are hard to dispute.