Housing market shifts to buyer's side in 7 metros despite low inventory
Strong homebuyer demand continued to define the housing market as home sales posted their highest year-over-year increase for January in more than a decade.
RE/MAX annual housing report showed that home sales rose 10.5% in 54 metro areas. The metros that led the year-over-year sales percentage gain included Los Angeles (+31.9%), Burlington (+28.7%), and New Orleans (+22.5%). However, home sales were down 26.9% compared to December.
The median sales price of a typical home was 8.9% higher than January 2019 but 3.4% below December at $256,000. The annual increase marked the 13th consecutive month of year-over-year price gains.
"January sales were encouraging, and were likely pushed in part by millennials coming into the market," said RE/MAX Holdings CEO Adam Contos. "It's a massive group of people, with many of them forming households and looking to buy their first homes.”
However, inventory kept shrinking, with the number of homes for sale across 54 metros down 15.6% year over year. Despite the tight inventory, January and December were the first back-to-back months with double-digit annual growth in home sales since June and July 2015.
Nationwide, inventory fell 3.1% month over month and 4.5% year over year. It was a buyer’s market in seven metro areas, with Indianapolis (8.8), Miami (6.8), Chicago (6.2) reporting a supply at or over six months.
The markets with the lowest inventory were Denver (1.2 months), San Francisco (1.3 months), and a four-way tie among Boise, Charlotte, Phoenix, and Seattle (1.4 months).
“Affordability and limited supply are still constraints, but overall, housing is in a much better place than it was a year ago," Contos said.
