Inventories are rising in a handful of housing markets that have seen large price increases and intense demand from investors over the past year.
The number of homes listed for sale in December rose by nearly a third from a year earlier in Orlando, Fla., to the highest level in more than a year, according to a report from Realtor.com. Other cities that posted large year-over-year gains:
Sacramento, Calif: +58%
Minneapolis: 35%
Atlanta: 27%
Tampa: 21%
Phoenix: 21%
Most of these metro areas have a few things in common: they’ve all witnessed huge annual price gains after inventories plunged, in part because of heavy buying by investors. They’ve also seen big drops in the number of foreclosed properties hitting the market; most of the newer listings are likely to include a higher mix of nondistressed sales from traditional owners who have resisted selling at lower prices over the past few years.
Even though inventories are rising, most of these markets still have relatively tight supplies of homes for sale given the recent pace of sales. In Phoenix, for example, it would take fewer than 4.3 months to sell the homes for sale in December at the prevailing pace of sales, according to the Arizona Regional Multiple Listing Service. That’s up from 3 months in December 2012, but down from 5 months in December 2010.
Nationally, listings fell by 6.2% in December from the prior month and stood just 1% above the historically low levels of one year earlier. Among the nation’s 29 largest metro areas, inventories stood above the year-earlier levels in 14 of them.
Median asking prices were 8% above their levels of one year earlier in December for the nation as a whole. Only two of the top 29 metro areas—Cleveland and Jacksonville, Fla.—posted annual declines in asking prices.
Meanwhile, half of all homes listed for sale in December had been on the market for 112 days, down from 118 days one year earlier. In Fort Lauderdale, Fla., the median market time fell to 71 days in December from 95 days one year earlier.
Only four markets—Sacramento, Phoenix, Minneapolis, and San Francisco—saw the average listing time increase from a year earlier in December.