Low Inventory Pushes Home Sales Lower, Prices Higher
A National Housing report released by RE/MAX recently shows that home sales continue to be pushed lower and prices higher. Reasons for this shift include weather and lack of inventory. The metros with the lowest supply of homes on the market include: Denver, San Francisco, Los Angeles, San Diego, and Houston.
Per the report, home prices have risen 11.6 percent in comparison to February 2013. The median home price has steadily increased over the past 25 months with 18 metro areas reporting double digit increases. In contrast, home sales have dropped by 8.8 percent. The report states “Although winter months normally record the lowest home sales of the year, unusually harsh weather disrupted numerous home sales in February. Of all 52 metro areas surveyed, 42 saw year-to-year sales decrease.” This continues to be a national problem, with the month’s supply of inventory .9 points below the balanced ideal. The report continues, “A combination of severe weather and low inventories appears to have slowed February home sales. The improving economy, increasing new-home construction and significant pent-up demand should all be critical factors as we move into the traditionally stronger sales months of spring and summer.” Sales in both spring and summer, in addition to sales in winter, will help determine the overall market for 2014.