The third consecutive month of lower year-over-year home sales in October contributed to the first year-over-year inventory increase in a decade according to the RE/MAX National Housing Report for October 2018. Meanwhile, the Median Sales Price recorded one of its lowest increases of 2018.
The RE/MAX National Housing Report for October saw sales decline 4.6% from a year ago – compared to sales drops of 11.6% in September and 1.1% in August – and was the eighth month of 2018 to record lower sales than 2017.
As a result, inventory is slowly being replenished, with the number of homes for sale in October increasing 1.0% over October 2017. October 2018 was the first month to show a year-over-year increase in inventory since October 2008 when two and a half times as many homes were for sale. The Months Supply of Inventory is now 3.5, compared to 3.3 a year ago.
“The market continues to move toward equilibrium. The modest inventory increase is a much welcome sign for buyers,” said RE/MAX CEO Adam Contos. “Although home sales were down year-over-year, it’s encouraging to see the magnitude of the decline decrease from the sharp drop we witnessed in September. The trend of easing price increases remains and that’s also a positive.”
October’s Median Sales Price of $236,000 marked the 31st consecutive month of year-over-year price increases and was the highest October price in the 10-year history of the report. Even so, the 4.9% gain was the third-lowest year-over-year growth of 2018.
Days on Market of 48 was an October record for fewest days and compares to 51 days in October 2017.
“The imbalance that has defined this market for so long continues to moderate,” said Contos. “However, it will take some time to recalibrate. Rising prices and interest rates and tight inventory levels continue. Buyer and seller expectations still appear to be a bit mismatched suggesting a choppy market remains in place.”
Of the 53 metro areas surveyed in October 2018, the overall average number of home sales is up 4.3% compared to September 2018, and down 4.6% compared to October 2017. Fourteen of the 53 metro areas experienced an increase in sales year-over-year including, Birmingham, AL, +15.1%, Tampa, FL, +11.0%, Trenton, NJ, +10.5% and Orlando, FL at +9.8%.
Median Sales Price – Median of 53 metro median prices
In October 2018, the median of all 53 metro Median Sales Prices was $236,000, down 1.3% from September 2018 and up 4.9% from October 2017. Only five metro areas saw a year-over-year decrease in Median Sales Price including Honolulu, HI, -7.4%, Anchorage, AK, -6.9%, Birmingham, AL, -6.3%, and Des Moines, IA, -3.3%. Five metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, ID, +18.0%, Omaha, NE, +11.8%, San Francisco, CA, +10.8% and Richmond, VA, +10.3%.
Days on Market – Average of 53 metro areas
The average Days on Market for homes sold in October 2018 was 48, up two days from the average in September 2018, and down 3 days from the October 2017 average. The metro areas with the lowest Days on Market were Omaha, NE, at 21, San Francisco, CA, at 28, Wichita, KS, at 30, and a four-way tie at 31 in Indianapolis, IN, Cincinnati, OH, Nashville, TN and Boise, ID. The highest Days on Market averages were in Hartford, CT, at 87, Augusta, ME, and Miami, FL, at 84 and New York, NY, at 74. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.
Months Supply of Inventory – Average of 53 metro areas
The number of homes for sale in October 2018 was down 2.6% from September 2018 and up 1.0% from October 2017. Based on the rate of home sales in October, the Months Supply of Inventory decreased to 3.5 from 3.7 in September 2018, and increased compared to October 2017 at 3.3. A 6.0-months supply indicates a market balanced equally between buyers and sellers. In October 2018, all but Miami, FL, at 7.5, of 53 metro areas surveyed reported a months supply less than 6.0, which is typically considered a seller’s market. The markets with the lowest Months Supply of Inventory are with San Francisco, CA, at 1.7, Boise, ID, at 1.9, Denver, CO, at 2.0, Manchester, NH, at 2.1 and a three-way tie at 2.3 in Minneapolis, MN, Boston, MA and Raleigh-Durham, NC.