posted on 05 March 2016
-- this post authored by Shu Chen
The housing market continues to recover from the foreclosure crisis. Home price indexes and home sales are returning to pre-crisis levels, and in some areas prices and sales have reached new highs. With demand strong and inventory thin, the share of homes selling for the list price or more has also returned to pre-bust levels.
With inventory tight, homes are more likely to sell above the asking price. Figure 1 shows the share of homes that sold at a price above, equal to or below the list price.  The number of homes selling at or above list price has recovered to early 2006 levels. That number was 3.5 times the trough in January 2008 and represented more than one-quarter of total sales in October 2015. Compared with homes selling for their list price or more, the number of homes selling for less than list price has been relatively stable over the past 15 years. Regardless of market conditions, there are always highly motivated sellers willing to drop their price.
Figure 2 shows the inventory of homes for sale since 2000.1 In October 2015, the inventory of existing homes for sale was back to its January 2006 level, and was 33.1 percent below its July 2007 peak. However, because of a shortage of skilled labor and lots, the new-home inventory remained historically low at 3.6 percent of total inventory in October 2015, only about one-quarter of its peak in October 2006.
Housing markets are different across the nation. Therefore sales and listing patterns also vary geographically. Figure 3 shows the share of homes that sold at, above, or below their list prices in 16 CBSAs during October 2015. San Francisco had the largest share of homes - 82 percent - that sold for at least the list price. Seattle and Los Angeles followed with 52 and 42 percent selling for the list price or more, respectively. Cincinnati and Chicago had the lowest share - 20 percent - of homes selling at or above the list price in October 2015.
Note: The U.S. statistics are based on data for 66 CBSAs. Each of these CBSAs has at least 50 percent coverage since 2000. CoreLogic MLS data coverage usually increases over time, which might also contribute to inventory increases.
 Figures 1 and 2 use 66 CBSAs to aggregate national level statistics. The inventory has not been adjusted for growth in the number of households over time. As the number of households increases over time, the 'equivalent' level of inventory should rise as well.
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