Riding two trends—declining sales and growing inventory— the U.S. housing market continued to transition from a seller's market to a buyer's market in February, according to the RE/MAX National Housing Report.
Home sales in the 54-market report have declined year-over-year for seven consecutive months, though February's downturn of 4.2% was the smallest since the 1.1% drop that started the streak in August 2018. At the same time, inventory grew 5.8% over February of 2018, marking the fifth consecutive month of growth following a decade-long trend of shrinking inventory. The Months Supply of Inventory also grew in February from 3.1 in 2018 to 3.4 this year.
Bucking these trends, the median sales price increased to $240,000, a year-over-year gain of 5.5% and a February record in the 10-year history of the report. That followed January's upturn of 4.6%.
Days on Market totaled 63—one day more than February 2018 and four days more than January 2019.
"Trends of five months or more often indicate significant shifts, and the year-over-year trends in declining sales and rising inventory have both reached that length now," said RE/MAX CEO Adam Contos. "It's interesting to see the slowing sales and growing inventories that benefit buyers and at the same time the record prices that benefit sellers. The big picture supports an ongoing return to more balanced conditions."
"The next few months will determine whether the shift brings a wave of buyers into the market for the spring selling season. Members of our network are reporting high local demand along with a need for even more inventory. The optimism for a solid spring exists – and a more balanced market certainly contributes to it."
Of the 54 metro areas surveyed in February 2019, the overall average number of home sales is up 10.2% compared to January 2019, and down 4.2% compared to February 2018. Leading the month-over-month sales percentage increase were Houston, TX at +28.8%, Birmingham, AL at +26.7%, and Raleigh-Durham, NC at 26.5%.
Median Sales Price – Median of 54 metro median prices
In February 2019, the median of all 54 metro Median Sales Prices was $240,000, up 2.2% from January 2019, and up 5.5% from February 2018. Nine metro areas saw a year-over-year decrease in Median Sales Price including Birmingham, AL at -4.2%, Hartford, CT at -4.0%, and Anchorage, AK at -3.9%. Four metro areas increased year-over-year by double-digit percentages, with the largest increases seen in Boise, ID at +16.0%, Cincinnati, OH at +13.2%, and Wilmington/Dover, DE at +12.6%.
Days on Market – Average of 54 metro areas
The average Days on Market for homes sold in February 2019 was 63, up four days from the average in January 2019, and up 1 day from the February 2018 average. The metro areas with the lowest Days on Market were Omaha, NE at 34, San Francisco, CA at 37, and a two-way tie between Denver, CO and San Diego, CA at 42. The highest Days on Market averages were in Augusta, ME at 120, Trenton, NJ at 113, and Hartford, CT at 96. 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 February 2019 was down 1.4% from January 2019 and up 5.8% from February 2018. Based on the rate of home sales in February 2019, the Months Supply of Inventory decreased to 3.4 from 3.9 in January 2019, and increased compared to 3.1 in February 2018. A six months supply indicates a market balanced equally between buyers and sellers. In February 2019, five of the 54 metro areas surveyed reported a months supply at or over six months, including Miami, FL at 7.6 and Indianapolis, IN at 7.4, which is typically considered a buyer's market. The markets with the lowest Months Supply of Inventory were Denver, CO at 1.4 and San Francisco, CA at 1.6.