A 21% year-over-year decline in the inventory of homes listed for sale by mid-May indicates “many metro areas hardest hit by price declines may be recovering,” according to Pro Teck Valuation Services.
This “significant decline” in the inventory of homes for sale is one of the most important residential real estate market developments in the past year, said Tom O'Grady, president and CEO of Pro Teck Valuation Services.
Its impact is significant because it affects the remaining housing inventory nationally. The current months of remaining inventory values show the U.S. housing market is stabilizing. Nationally the MRI is fluctuating at or below the five-month threshold, which is at the same level it was “throughout the 2002 to 2005 period” when nationwide home prices were experiencing their largest gains.
A specific market is deemed “strong” if the home inventory in the area represents a supply of 0-5 months, whereas metro areas with inventories on the market from 16-20 months are considered "weak." In May the national MRI was at 6.3 months, its lowest level since 2006.
More granular analysis shows the declines in housing stock are even greater for a number of the hardest-hit metros around the country such as Phoenix, Miami, Atlanta, Orlando and Riverside-San Bernardino, Calif., where price declines were among the highest in the country since the market peak in 2006.
The May HomeValueForecast.com includes listings of the 10 best and 10 worst performing single-family home markets in the top 200 CBSAs based on real estate market indicators including the number of foreclosure sales, number of active listings, average listing price, number of sales, average active market time, average sold price and new listings.
According to Michael Sklarz, principal of collateral analytics and contributing author to the report, May data also indicate the emergence of new positive trends in the “Rust Belt” states, once again highlighting that “all real estate trends are local.”
For example, in Michigan and Illinois, “due to significant declines in active listing counts over the past year," MRI values have stabilized. Meanwhile a high percentage of the bottom-ranked metros are located in the Northeast where prices have held up much better since the market peak in 2005-2006 compared to the current top-ranked markets.
