This past month's real estate numbers are notably less concerning than April's, but still strange upon detailed examination.

To begin, current days on the market averaged just 138, which is lower than we have seen in seven months, when the number fell to 135 in October. This beat last month's already low 149, and fell 25% from 183 days in May 2013. This is also among the lowest we have seen in several years; homes are selling so fast, it is difficult to keep them in stock.

This increase in sale speed is coupled with a slight price increase over the prior month. Homes in May fetched a median sale price of $380,000, compared to the previous month's $368,250. However, this number is far lower than last year's $415,000 by more than 8%. The percentage of sold to list price increased nearly a full percentage point over the past month, from 94.28% to 95.16%. Home sellers are receiving amounts closer to their listed price.

With all this talk of low inventory, it is important to note that over the past four months, inventory has been steadily increasing. Current inventory available in May was 2,023, which has been increasing every month since February, when the number dipped to 1,859. An increase in newly constructed homes on the market may help to explain this.

Current inventory has decreased a full 20% since the same time last year, when 2,531 homes were available. While inventory is far lower, it is strange that the number of monthly sales is almost the same as it was in May of last year. 237 homes were sold last month, compared to 259 in May 2013. However, compare this quarter to the period of June through September 2013. The average number of monthly sales from this quarter was nearly 100 less- 221, compared to 310 during summer of 2013. This represented a decrease of 29%.

All things considered, these are not the worst problems the market could possibly have. Essentially, we are confronted with low inventory and fluctuating prices, and as a result, few choices for home buyers. While selling today is easy and fast, the low inventory creates a Catch-22 for sellers looking to acquire a new home.

Posted by Anthony Licciardello on
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