The spikes in sales in late-2009 and mid-2010 were due to the home buyer tax credit deadlines. Outside of these spike periods, the past two months of sales are at the highest levels in 5 years.
Inventory has been steadily falling. The charts show the raw number of visible inventory of homes for sale. There are seasonal patterns, with more listings in spring and summer compared to winter.
The ‘shadow’ inventory of distressed mortgages and REOs held by banks and the federal government has also been falling. It isn’t, therefore, the case that visible inventory is falling while shadow inventory rises. Both visible and shadow inventories are falling.
The median home price showed a slight increase in February from one year ago. The increase is more due to the mix of homes issue where the upper-end market, which had been very sluggish in recent past, is beginning to move. The market is still dominated by sales in the lower price points.
Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.