WASHINGTON – Jan. 28, 2015 – For the first time in 16 months, the total inventory of U.S. homes available for sale dropped in December, according to the National Association of Realtors
®. While the decline was slight – less than 1 percent month-over-month – the drop does represent "a reversal to the general growth of listings that had been occurring throughout 2014," writes Lawrence Yun, NAR's chief economist. "More inventories are needed, not less. Or else, home prices could re-accelerate." In Florida, the inventory of homes for sale fluctuated between a low of 104,339 in January 2014, to high of 108,105 in October, according to monthly numbers released by Florida Realtors Industry and Data Analysis Department (IDA). However, the inventory declined after October. Month-to-month, the number of active listings dropped about 0.5 percent month-to-month in November and another 2 percent month-to-month in December. In addition, Florida patterns don't always follow more general U.S. fluctuations. In December, the
inventory of Florida homes was up 1.2 percent year-to-year. Nationwide in December, however, 1.85 million homes were listed for sale – an 11 percent drop from November and 0.5 percent drop from year ago levels, according to NAR housing data. A drop in inventory is common from November to December, but Yun notes "what is of interest is the year-over-year decline in inventory because this hints at possible acceleration in home prices in upcoming months."
Shrinking Inventory In December, the month's supply of existing-homes on the market was 4.4 months; 6 months is considered healthy by most economists' standards. U.S. home prices may have already begun "re-accelerating" in some markets, Yun suggests. In spring and summer last year, the median price was rising at 4 to 5 percent. In November and December, prices rose by 6 percent. In Florida, median home prices rose in November rose 3.5 percent year-to-year; in December home prices rose 6.9 percent over the same year-to-year time frame.
Florida Realtors National Overview - The total inventory of homes available for sale fell in December for the first time in 16 months. The decline was very modest of less than 1 percent from the comparable month the year before. Nonetheless, it represents a reversal to the general growth of listings that had been occurring throughout 2014. Months supply is already low at 4.4 months. More inventories are needed, not less. Or else, home prices could re-accelerate.
- Specifically, at the end of December there were 1.85 million properties listed for sale, down 11 percent from November and down 0.5 percent from one year ago. The monthly decline was fairly normal which occurs every year from November to December. But what is of interest is the year-over-year decline in inventory because this hints at possible acceleration in home prices in upcoming months.
- For those technically minded, after applying statistical seasonable adjustment factors, the inventory has declined for two straight months, implying a genuine tightening of supply. Therefore, home prices could re-accelerate.
- Home prices in fact appear already to be re-accelerating. In spring and summer of last year, the median price was rising at 4 to 5 percent. In November and December, the price increased by 6 percent.
- Do not expect any help to inventory from distressed properties. The shadow inventory – those homes already in the foreclosure process or with serious mortgage delinquency – has greatly shrunk. Hence, far fewer newly foreclosed properties will be hitting the market. Those REALTORS® who specialize in distressed property sales should be aware that there will be less business opportunities in this field going forward.
- Because of shorter supply, distressed properties are no longer being sold at deep discounts. Many buyers of these previously thought to be worthless properties have done well in terms of rental return and price appreciation. From this experience, buyers are now eager to bid up.
WASHINGTON – Jan. 28, 2015 – For the first time in 16 months, the total inventory of U.S. homes available for sale dropped in December, according to the National Association of Realtors®. While the decline was slight – less than 1 percent month-over-month – the drop does represent "a reversal to the general growth of listings that had been occurring throughout 2014," writes Lawrence Yun, NAR's chief economist. "More inventories are needed, not less. Or else, home prices could re-accelerate." In Florida, the inventory of homes for sale fluctuated between a low of 104,339 in January 2014, to high of 108,105 in October, according to monthly numbers released by Florida Realtors Industry and Data Analysis Department (IDA). However, the inventory declined after October. Month-to-month, the number of active listings dropped about 0.5 percent month-to-month in November and another 2 percent month-to-month in December. In addition, Florida patterns don't always follow more general U.S. fluctuations. In December, the inventory of Florida homes was up 1.2 percent year-to-year. Nationwide in December, however, 1.85 million homes were listed for sale – an 11 percent drop from November and 0.5 percent drop from year ago levels, according to NAR housing data. A drop in inventory is common from November to December, but Yun notes "what is of interest is the year-over-year decline in inventory because this hints at possible acceleration in home prices in upcoming months." Shrinking Inventory In December, the month's supply of existing-homes on the market was 4.4 months; 6 months is considered healthy by most economists' standards. U.S. home prices may have already begun "re-accelerating" in some markets, Yun suggests. In spring and summer last year, the median price was rising at 4 to 5 percent. In November and December, prices rose by 6 percent. In Florida, median home prices rose in November rose 3.5 percent year-to-year; in December home prices rose 6.9 percent over the same year-to-year time frame. Florida Realtors National Overview 
