October saw a continuation of the trend throughout the year, with both home prices and home sales rising above the levels seen one year ago. In the October RE/MAX National Housing report, a survey of MLS data in 52 metropolitan areas, closed transactions increased 17.8 percent over October 2011.
The Median Home Price rose 2.1 percent higher than the median seen last October, representing the ninth month in a row that prices have been higher than the same month last year. The falling Inventory is a significant concern in many markets. The number of homes for sale in October was 28.9 percent lower than last October. This has caused prices to rise, but also presents a serious challenge for many homebuyers. Multiple offers and some bidding wars have occurred in markets where inventory is sharply lower.
“As we enter the fourth quarter, 2012 is looking like the turn-around year for housing, with significant increases in sales and prices,” says Margaret Kelly, CEO of RE/MAX, LLC. “However, we recognize that this recovery is still fragile and dependent on more reasonable lending and regulation. If qualified buyers can obtain mortgages and more inventory comes to market, this recovery could become even stronger next spring.”
Transactions – Year-Over-Year Change
The October RE/MAX National Housing Report shows that home sales were 17.8 percent higher than October 2011. This represents the sixteenth month in a row when sales were higher than the same month in the previous year. Sales were also 5.4 percent higher than the previous month, which is an impressive performance since seasonal patterns typically see a slight drop from September to October. Of the 52 metro areas surveyed in October, 48 saw higher sales than one year ago and a record 40 saw double digit increases including: Providence, R.I. +48.0 percent, Chicago, Ill. +44.0 percent, Albuquerque, N.M. +39.3 percent, Burlington, Vt. +37.0 percent, Wichita, Kan. +32.2 percent, Nashville, Tenn. +31.5 percent and Charlotte, N.C. +31.3 percent.
Median Sales Price
$158,900 was the median price of all homes sold in October. This represents a 3.7 percent drop from the median price in September, but a 2.1 percent increase from October 2011. October is the ninth consecutive month with higher prices than the same time last year. Prices are now following a traditional trend of dropping lower in the Fall and Winter, after a peak in June. However, prices remain higher than the same month in 2011. Of the 52 metro areas surveyed for the October RE/MAX National Housing Report, a significant 92 percent or 48 metros reported higher prices than last year, with 18 seeing double-digit gains including: Phoenix, Ariz. +33.9 percent, San Francisco, Calif. +31.2 percent, Detroit, Mich. +26.3 percent, Boise, Idaho +24.7 percent, Miami, Fla. +22.0 percent, Seattle, Wash. +16.9 percent, and Tampa, Fla. +16.5 percent.
Days on Market – Average of 53 Metro Areas
The average Days on Market for homes sold in October was 82. This is just one day higher than the 81 day average in September, but 13 days less than the average of 95 seen last October. October represents the fifth time in the past 12 months that a Days on Market average was below 90, and it was the second lowest average since June 2010. The Days on Market average continues to fall in many markets due to very low inventory. Days on Market is the number of days between first being listed in an MLS and when a sales contract is signed.
Months Supply of Inventory – Average of 54 Metro Areas
In October, the number of homes for sale fell 6.3 percent from September and 28.9 percent from inventory levels seen in October 2011. Month-to-month inventories have now fallen for 28 consecutive months. Rising prices are a result of sharply declining inventories, but a low inventory also results in fewer closed transactions. With the rate of sales in October, the average Months Supply was 5.2, two and a half months lower than the 7.7 average in October 2011. A low Months Supply continues to be seen in cities like San Francisco, Calif. 1.1, Los Angeles, Calif. 1.5, Orlando, Fla. 2.4, Denver, Colo. 2.4, Washington, DC 2.5, Seattle, Wash. 2.6, San Diego, Calif. 2.7, Detroit, Mich. 2.7 and Miami, Fla. 2.8.