Housing Market Stabilizes as Inventories Shrink Nationwide

Despite reports that in a handful of states, notably California, housing-inventory contraction has gone too far, the housing markets nationwide continue to stabilize, according to data gathered by realtor.com from 146 metros up to May 2012.

If you’re a professional agent with, say, a renewed license in South Carolina and looking this year to take full advantage of the resurgence of the real estate industry, now’s a very good time to do it.

According to the real-estate-listings online source, May built on the previous month’s year-over-year positive trajectory: for-sale inventory fell 20.07 percent, median age of for-sale inventory dropped 9.78 percent, and median list prices climbed 3.17 percent to $194,900. 

By the end of May, the national for-sale inventory had 1.88 million units, about 60% of an inventory peak of 3.1 million units in September 2007, at the height of the housing-market debacle. Some of the hardest-hit markets—metros in Florida, Arizona, and California—are now delivering consistent, month-by-month turnarounds. For instance, Phoenix and Tampa-St. Petersburg, Florida were ranked by realtor.com in the top 10 among metros with year-over-year percentage drops in for-sale inventory.

California’s metros dominated the top 10 that had the biggest reduction in inventories from last year: Oakland at No. 1 (it had 56.6 percent fewer listings by May 2012 than a year ago); San Jose at No. 6 (40.88 percent fewer listings); and San Francisco at No. 10 (38.9 percent fewer listings).

Inventories of homes in California continued to slide in May, further pulling down the supply of homes for sale to just 3.5 months, almost half of what many housing analysts consider a healthy balance between supply and demand. The new inventory low, the result of the fastest sales turnover since February 2009, sank from a supply of 4.2 months in April and 5.7 months in the same month a year ago, reported inman.com. It all means that there is not enough supply to meet the high demand for homes.

"Low housing inventory continues to be the critical issue in the California market," stated California Association of Realtors (CAR) chief economist Leslie Appleton-Young in a press release that announced the latest inventory figures. "Inventory levels have not been this low since December 2005, when the supply matched the current level."

CAR revealed that single-family detached homes went at a seasonally adjusted annual rate of 572,260 in May, almost as fast as the rate in February 2009, the quickest pace in recent years.  Sales of existing, single-family detached homes increased 3.4 percent in April. 

With sales increasing, the San Francisco Bay Area registered the highest shortage of homes for sale, with places such as Alameda, Contra Costa, Santa Clara, and San Mateo posting inventory levels in the two- to three-month range.