Photo: Robert Clark
National home prices remained at all-time highs in July while inventory levels rose in a number of the country’s pricier markets.
Despite the uptick, most prospective homebuyers don’t feel that the inventory crisis will improve in the foreseeable future.
That’s according to two separate new releases by the National Association of Home Builders (NAHB) and Realtor.com.
Over the last year, inventory levels surged in 33 percent of the country’s largest 45 housing markets in July, according to the Realtor.com report.
In the 45 largest metros, homes prices are significantly higher in markets where inventory is up compared to markets where inventory is still falling, averaging $494,000 and $302,000, respectively.
The turnaround inventory is primarily centralized in higher-priced submarkets. For example, nationally, inventory of homes listed above $350,000 was up 5.7 percent annually in July, while inventory of homes below $200,000 was down 15.6 percent from the same time last year.
“Continued price gains in already high priced markets have put homes further out of reach causing some buyers to hesitate or look elsewhere,” Realtor.com’s Director of Economic Research Javier Vivas tells Livabl.
The inventory boom was mostly confined to those high-priced localized markets, like Silicon Valley in California.
Inventory in the San Jose metro area — one of the country’s hottest and priciest housing markets — jumped 44 percent year-over-year in July. The rebound was “a quick about-face from its May inventory declines,” Realtor.com writes in the report.
Inventory growth was also recorded outside of the consistently hot Golden State markets in July.
“It’s not just California markets that have seen an increase in inventory, markets on both coasts and in the South reported inventory increases in July,” Danielle Hale, chief economist for Realtor.com, says in the digital release.
Despite July’s inventory boost, the national inventory crisis is far from over.
“Mid and high-level priced listings are recovering the fastest in the markets where inventory is growing,” Vivas says.
Entry-level, or starter, homes remain in extremely short supply but high demand.
National inventory is not yet growing but merely showing the early signs of “shifting gears,” Realtor.com writes. National inventory levels posted a 4 percent year-over-year decline in July, which was slower than the 8 percent average decline recorded over the last year.
“Although signs of an inventory turnaround are encouraging, whether they mean good news for buyers remains to be seen,” Hale writes in the report.
Meantime, the results of a new quarterly survey conducted by NAHB suggest that most homebuyers reportedly don’t think that housing availability will improve anytime soon.
Some 69 percent of prospective homebuyers said that they expected their home search to remain about the same or get harder over the next six months.
Comparatively, more Millennials reportedly expected an easier home search in the coming months, with 22 percent of Millennials expecting an easier home search versus 18 percent of Generation X respondents.
And, most respondents (63 percent) expect to see fewer or about the same homes for sale over the next six months.