Inventory Down, Demand Up, Sales Slow
Home-selling season started with a bang in 2017, but that quick pace has since cooled, according to a report out this month.
The RE/MAX National Housing Report, which draws on listing data from 53 metro areas, showed that April home sales dropped 4.1 percent below March’s sales and 4.5 percent below sales in April 2016.
To explain this change, the report’s authors point to two trends that have dogged the real estate market recently: tight inventory combined with high prices. April’s median sales price was $226,000, the highest price for any April and the 13th consecutive month of year-over-year price increased. The month’s supply of inventory dropped to 2.8 months, the first time in the report’s history that the supply dropped below 3 months. At the same time, overall inventory dropped 17.6 percent from April 2016.
“We may be seeing some frustration from buyers,” says Dave Liniger, RE/MAX CEO, chairman of the board and co-founder. “Inventory is tighter than ever, while strong demand keeps driving up home prices. At the same time, many potential sellers may also be reluctant to list their homes because the tight inventory might impact them as buyers. Home buyers and sellers will need to work with experienced real estate agents to navigate this tough market.”
There were a few bright spots in the market, with ten metro areas seeing an increase in sales. Wilmington/Dover, Delaware increased 13.8 percent; Fargo increased 5.7 percent; Trenton, New Jersey increased 5.0 percent; Phoenix increased 4.3 percent; and Houston increased 2.3 percent.
Heading into the summer, high demand is expected to continue as long as job gains continue. Experts say that many metro areas will need to see a significant rise in new and existing inventory to meet this demand and cool down price growth.
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