Are We Headed For A Turn Around In The Housing Market

Are We Headed For A Turn Around In The Housing Market

U.S. Home Inventory Falls For Fifth Straight Quarter, But Signs Of Turnaround Emerge According to Trulia.

Home Inventory Falls Again in Longest Downward Streak Since Market Bottom in 2012, While Some California, Nevada, and Florida Cities Show Signs of Recovery


Trulia's Inventory and Price Watch: The Number Of Homes For Sale Continues To Drop


Nationally, housing inventory continues to decrease. This summer, the number of homes on the market dropped for the fifth straight 

quarter, extending a slump and dropping 6.7% over the past year. The number of starters and trade-up homes on the market nationwide has dropped by 10.7% and 9.2%, respectively. Meanwhile, premium home inventory dropped just 3.2% over the past year.

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The persistent and disproportional drop in starter and trade up home inventory is pushing affordability further out of reach for

 homebuyers. Starter and trade-up homebuyers need to spend 1.7% and 0.9% more of their income than this time last year, whereas 

premium homebuyers only need to shell out 0.6% more of their income.


                                                                                       2016 Q3 National Inventory Monitor


Housing Segment

2016 Q3 Inventory

Change, 2015 Q3 - 2016 Q3


Median List Price

Share

Inventory

% of Income
Needed to
Buy Median
Price Home in
Segment

% Change
in Median 
List Price

Percentage
Point 
Change in
Share

% Change in
Inventory

Additional Share
of Income
Needed to Buy
a

 Home 
(Percentage
-Point Change)


Starter

$161,202

23.0%

297,732

38.5%

7.4%

-0.4 pts

-10.7%

+1.7 pts


Trade-Up

$280,579

24.0%

306,376

25.5%

6.4%

-0.9 pts

-9.2%

+0.9 pts


Premium

$579,713

52.9%

650,498

13.9%

7.5%

+1.2 pts

-3.6%

+0.6 pts


Among the 100 largest U.S. metro areas. Share is the percent of for-sale homes that fall into each segment, which is defined separately for each metro. The median price for each segment is the stock-weighted average of the median price of each segment in each metro. Some point change estimates may be slightly different than stated values because our differing procedure occurs before rounding.


Starter Homebuyers Face the Biggest Impacts of Declining Affordability 


Falling inventory continues to take a toll on affordability. Starter homebuyers need to dedicate 38.5% of their monthly income to buy a starter home – a 1.7 point increase from last year. While not a hard ceiling, applying for a mortgage with a debt-to-income ratio of more than the 36% guideline used by lenders such as Fannie Mae will make the mortgage approval process more complicated for first-time buyers, especially when factoring in other debt like student loans, credit cards, and auto payments. Most trade-up and premium home buyers, on the other hand, are still in the clear. Each would need to spend just 25.5% and 13.9% of their income to buy a home, respectively.

Signs of Increased Inventory Appear on the West Coast 


Although low inventory has been a persistent national trend over the past few years, relief is on the way for homebuyers in some markets. Of the 100 largest markets, 21 have experienced increases in inventory over the past year, with many showing double-digit gains. However, half of these markets are in just two states: California and Florida. When looking at markets that have shown rising inventory for at least three consecutive quarters, four markets have hit an upward streak: Bakersfield, Calif., San Francisco, Sarasota, Fla., and West Palm Beach, Fla.

Housing Markets where Inventory is on the Rise

U.S. Metro

Total Inventory,
2015Q3

Total Inventory,
2016Q3

% Change in 
Inventory

Cape Coral-Fort Myers, FL

4,991

6,825

36.7%

Miami, FL

11,216

14,928

33.1%


Las Vegas, NV


10,315


13,394


29.8%

Fresno, CA

1,370

1,705

24.4%

North Port-Sarasota-
Bradenton, FL

5,646

6,967

23.4%

Oklahoma City, OK

4,993

5,996

20.1%

San Francisco, CA

1,063

1,269

19.3%

West Palm Beach, FL

10,083

11,879

17.8%

Fort Lauderdale, FL

8,984

10,417

15.9%

Bakersfield, CA

2,134

2,360

10.6%

San Diego, CA

6,304

6,897

9.4%

San Jose, CA

1,809

1,966

8.7%

Memphis, TN

3,898

4,202

7.8%

Phoenix, AZ

19,067

20,383

6.9%

Winston-Salem, NC

2,870

3,041

6.0%

Salt Lake City, UT

1,689

1,779

5.3%

Houston, TX

23,079

24,248

5.1%

Milwaukee, WI

4,022

4,139

2.9%

Denver, CO

7,225

7,426

2.8%

Little Rock, AR

3,971

4,063

2.3%

San Antonio, TX

7,549

7,580

0.4%

NOTE: Among the 100 largest U.S. metro areas.


QUOTES FROM TRULIA'S CHIEF ECONOMIST RALPH MCLAUGHLIN:

"Nothing is permanent. Not even low inventory. With notoriously stingy markets like San Francisco, San Jose andDenver showing signs of picking up after prolonged periods of declining inventory, homebuyers in these markets are beginning to see a break in gridlock and should experience more choice in the months ahead."

"As inventory continues to fall nationally across starter, trade up, and premium home segments, starter homebuyers will need to dedicate a larger share of their income towards a home. The good news, however, is that incomes are on the rise."


About Reinsch Real Estate 
Reinsch Real Estate Group- Powered by EXP Realty offers buyers and sellers deeper insight into the change in supply and affordability of homes over the past year, Reinsch Real Estate,Group Inc. (“RRG”) provides a stress-free transaction process from contract to close. With such a wide array of personalities that Las Vegas introduces us to, we are constantly trying to find ways to better serve my fast, friendly and fun population. RRG strives to do better – always better! The Reinsch Real Estate Group works for you every single day!  see here.  Below you will see our award-winning real estate platform for all consumers.  So easy to use and to understand, there truly is nothing quite like it! 

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Dated: September 21st 2016
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