The RE/MAX National Housing Report for August 2018 shows increasing home prices, low inventory and a reduction in days on market. These combined factors made August 2018 the sixth time this year that home sales lagged behind last year’s pace—but only slightly at -1.1 percent.
Home prices rose by 3.7 percent over August 2017, much lower than the year-over-year price increase of 5.4 percent from August 2016 to August 2017. In fact, the past three months of 2018 have trailed 2017’s rate of price growth year-over-year—compare that to four of the first five months of 2018 when year-over-year price increases easily topped those posted in 2017.
The Median Sales Price of $248,500 marked the 29th consecutive month of year-over-year price increases.
Even though active inventory dropped for the 118th consecutive month, the decline of 5.4 percent from August 2017 marked the smallest year-over-year decrease since August 2014. In addition, the August 2018 inventory drop marked the fourth consecutive month in 2018 to post single-digit percent declines, rather than the double-digit monthly drops consistently seen in early 2018 and over the previous three years.
“It varies by market, but we’re hearing that buyers are being more selective and sellers are becoming more pragmatic,” said RE/MAX CEO Adam Contos. “That dynamic could bring inventory levels up, especially in the most overheated markets, where we expect to see the clearest signs of equilibrium returning. The economy is strong and potential buyers are out there—they just need more listings, at the right price points, to consider. We believe that balance will return, which will be good for everyone in the long run. It’s just a matter of when.”
Contos added that although the lack of inventory continues to be a challenge, the trends suggest that the market finally appears to be rebalancing.
“The moderation we are experiencing seems to be a bit more than the normal seasonal lull we’d expect this time of year,” said Contos.
Of the 54 metro areas surveyed in August 2018, the overall average number of home sales is down 0.4 percent compared to July 2018, and decreased 1.1 percent compared to August 2017. Twenty-two of the 54 metro areas experienced increases in sales year-over-year including, Houston, TX, +34.2 percent, Burlington, VT, +11.5 percent, New Orleans, LA, +10.7 percent and Tulsa, OK, 10.5 percent.
Median Sales Price – Median of 54 metro median prices
In August 2018, the median of all 54 metro Median Sales Prices was $248,500, down 0.7 percent from July 2018 and up 3.7 percent from August 2017. Only four metro areas saw year-over-year decreases in Median Sales Prices including Trenton, NJ, at -1.9 percent, Little Rock, AR, at -1.1 percent, Burlington, VT, at -0.3 percent and Birmingham, AL, at -0.03 percent. Three metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, ID, +16.8 percent, San Francisco, CA, +11.7 percent and Augusta, ME, +10.2 percent.
Days on Market – Average of 54 metro areas
The average Days on Market for homes sold in August 2018 was 43, up two days from the average in July 2018, and down 4 days from the August 2017 average. The metro areas with the lowest Days on Market were Omaha, NE, at 21, Seattle, WA, at 23, and San Francisco, CA, Denver, CO, and Cincinnati, OH, all tied with 25. The highest Days on Market averages were in Augusta, ME, at 91, Miami, FL, at 78, Hartford, CT at 77 and New York, NY, at 65. 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 54 metro areas
The number of homes for sale in August 2018 was down 1.0 percent from July 2018 and down 5.4 percent from August 2017. Based on the rate of home sales in August, the Months Supply of Inventory increased to 3.0 from 2.9 in July 2018, and decreased compared to August 2017 at 3.1. A 6.0-months supply indicates a market balanced equally between buyers and sellers. In August 2018, all but one, Miami, FL, of 54 metro areas surveyed reported a months supply at or less than 6.0, which is typically considered a seller’s market. The markets with the lowest Months Supply of Inventory are San Francisco, CA, at 1.4, Boise, ID, at 1.6, Denver, CO, at 1.7 and Salt Lake City, UT, at 1.8.
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