Housing Market Leveling Off

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Key Market Indicators Shift from Supply to Demand

A new report by Realtor.com found that as the year’s peak home-buying season comes to a close, key market indicators are pointing to a shift in the dynamics of the housing market, suggesting that future home value appreciations may likely be driven by market demand, rather than inventory shortages.

An analysis of the summer home-buying season ending in August shows year-over-year changes now within the single-digits for three key indicators – inventory count, median age, and median list price, signaling a leveling of the market not seen for some time.  The national market was virtually flat month-over-month compared with July for both inventory and median list price, and registered a slight increase in median age of inventory.

 

August single-family home sales ease back while condo and townhome market takes off

Following a strong performance in July, California’s housing market pulled back in August as mortgage rates continued to inch up, although sales of condominiums and townhomes remained robust, C.A.R. reported this week.

Sales in August were down 2 percent from a revised 443,500 in July and down 1.9 percent from a revised 443,030 in August 2012.  The statewide sales figure represents what would be the total number of homes sold during 2013 if sales maintained the August pace throughout the year.  It is adjusted to account for seasonal factors that typically influence home sales.

Home prices continued in an upward trend in August, reaching levels not seen in more than five years.  The statewide median price of an existing, single-family detached home was up 1.7 percent from July’s median price of $433,910 to reach $441,330 in August, the highest price recorded since December 2007.  August’s price was 28.4 percent higher than the revised $343,800 recorded in August 2012, marking a year and a half of annual price increases and the 14th straight month of double-digit annual gains.  The median sales price is the point at which half of homes sold for more and half sold for less; it is influenced by the types of homes selling as well as a general change in values.

 

Home-Buyer Demand Declines in August

A report by Redfin found that home-buyer demand declined in August. According to the Real Time Demand Pulse, the number of home tours requested by Redfin customers declined 10 percent month-over-month in August and 6 percent compared with the previous year. Week-over-week, tours declined 9.5 percent.

Offers to purchase homes made by Redfin customers also declined in August, falling 7.5 percent compared with July and 4.3 percent from the previous year. Week over week, offers were down 0.9 percent, compared with a 0.7 percent gain in 2012.

According to Redfin, a combination of factors likely contributed to the August decline in home-buyer demand. Mortgage rates and home prices continued to rise, pricing more buyers out of the market. August’s Redfin Buyer Survey found that 63 percent of buyers said rising mortgage rates are impacting their ability to buy the home they want. Buyers also faced another month of low inventory and were likely feeling fatigued after continued bidding wars, causing them to pause or delay their home-buying plans.

Source: California Association of Realtors

Category : Blog

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