The polar vortex is proving to be no sweat for home buyers, according to the latest National Housing Trend Report from realtor.com®.
Despite severe winter weather conditions across the nation, the 2014 home buying season got off to a good start with a year-over-year increase in inventory and sustained growth in home prices.
The median list price for January rose 8.3 percent compared to the same time last year, according to the realtor.com® data. The number of properties for sale was up 3.1 percent. And the median age of inventory was essentially unchanged, indicating a transition to a “less frenzied market” than in January 2013.
The solid start “is an encouraging sign of sellers’ interest, particularly given the adverse conditions brought on by the polar vortex,” said Errol Samuelson, president of realtor.com®. “We saw the tight-supply market of last fall carry all the way into November — later than is typically expected — and this early rise in inventory is a welcome trend.”
Looking ahead, the national median existing home price is projected to rise about 5 percent to 6 percent in 2014, according to the National Association of REALTORS®, which cites job growth and large, pent-up demand as drivers of the market in light of rising mortgage rates.
The California, Detroit and Nevada markets continue to top the list of areas with the largest year-over-year increases in median list prices, boasting increases of 20 percent or more.
But the polar vortex took a toll in some parts of the nation. Strong markets hit hard by winter weather — such as Boston, Chicago and Detroit — saw up to 10 percent month-over-month declines in inventory. Once winter weather subsides, however, these markets may experience a strong recovery, realtor.com® analysts said.
|January 2014||Year-over-Year Percentage Change||Month-over-Month Percentage Change|
|Number of Listings||1,672,799||3.1 percent||-3.3 percent|
|Median Age of Inventory||115 days||0.0 percent||2.7 percent|
|Median List Price||$195,000||8.3 percent||0.1 percent|
- Inventory increasing: At the national level, for-sale inventories are now 3.1 percent higher than they were a year ago, and the rise in inventory is spreading to more markets across the country. In January 2013, just eight markets out of the 146 registered increases in inventory. This January, 83 of the 143 markets tracked by realtor.com (58 percent) showed increases in inventory, year over year. While the next few months will be critical to watch, these trends suggest a more balanced housing market going into the 2014 home buying season.
- Price increases more widespread: Median list price rose a healthy 8.3 percent in January 2014 compared to the same time last year. In January 2014, 44 markets saw year-over-year list price increases of 10 percent or more, compared to January 2013, when 24 markets registered double-digit increases in median list price. The number of declining markets in terms of median list price dropped from 58 in January 2013 to just 13 in January 2014.
- Days on market stabilizing: Median age of inventory remained steady in January 2014 compared to the same time last year, at 115 days. However, the number of markets showing year-over-year declines in inventory has dropped significantly, from 133 markets in January 2013 to 78 markets in January 2014. Meanwhile, 56 markets showed year-over-year increases in inventory in January 2014, compared to just nine markets in January 2013.
- California, Detroit and Nevada markets continue to dominate the list of areas experiencing the largest year-over-year increases in median list prices, with increases of 20 percent or more.
- Entering into the spring months, it is important to watch for markets with a possible resurgence, such as Denver, Boulder, Chicago and Corpus Christi, TX, where depressed inventories have been accompanied with large year-over-year gains in median list prices. Sustained low inventories in these markets could to lead to demand-driven housing price increases that characterized California and most of the sand states in 2013.
- Strong markets particularly worth noting as those worst hit by climate-driven troubles include Boston with a 10.9 percent month-over-month inventory decline, Chicago with a 6.1 percent inventory drop, Denver with a striking 13.5 percent inventory decline, Detroit with a 6.8 percent reduction, New York with a 9.5 percent decline, and Philadelphia with an 8.2 percent decline. These markets may experience notable inventory recovery after prohibitive weather conditions subside.