The housing market’s home supply dries up in March

Home buyer competition reached new extremes in March as sales rose and an already historically low inventory supply was further reduced.

According to Remax ‘National Housing Report, closed sales increased 34.3% from February and 15% from March 2020. Broken down by the 53 largest subway areas, New York led the country with a 62.6% annual increase in transactions as more borrowers returned to cities they left en masse a year ago. The Empire State significantly outperformed the rest of the country, with the second and third largest year-over-year increases in San Francisco at 37.9% and Miami at 36.9%.

Inventories fell to a new record low for the ninth year in a row, falling 8.9% month-over-month and 45.2% year-over-year. The housing supply also fell from 1.7 months in February and 3.2 months in the previous year to a new low of 1.1 months. The previous record was 1.6 months. A 6 month delivery defines the market equilibrium.

Providence, RI, had the largest annual inventory decline at 84.4%. Albuquerque, NM, and Hartford, Conn., Drew tight, declining 82.6% and 82.5%, respectfully. At the same time, Albuquerque, Denver, Seattle and Boise, Idaho had the lowest supply at 0.4 months.

“Right now it’s definitely a seller’s market and homes are selling at feverish levels, compounding this historically low inventory situation,” said Adam Contos, CEO of Remax Holdings, in the report. “New offers are coming up, but because houses sell so quickly, inventory can’t keep up.”

The time to market fell from 42 in February and 54 in March 2020 to an average of 38 days. It’s the fifth time the average has fallen below 40 days and all five have occurred in the past seven months. The reporting record was set to 36 days in November 2020. Salt Lake City had the fewest market days at 16, followed by 17 in Boise and Seattle. Conversely, the longest times were in Des Moines, Iowa, with 94 days, in Miami with 90 and in New York with 84 days.

With this frenzied activity, the median sales price rose to a new record of $ 303,000, up 4.5% monthly from the previous record of $ 290,050 and 14.3% per year. The median home price rose in every market except for a 4.5% annual decline in Honolulu. Boise reappeared in the ranking and this time was at the top of all metros with an average price jump of 31.9% from March 2020. Augusta, Maine followed at 21.6% and then came down in Pittsburgh at 20.8%.

Housing has become increasingly unaffordable, according to a separate study by LendingTree. Since 2012, the average home price has increased by 69.7% compared to 28.8% for the median income over the same period.