Are the Fireworks Subsiding in the Housing Market?

Although the housing market in most cities soared in 2013, the fireworks began to subside by year’s end, based on the latest analysis of housing market trends by ZipRealty.

Median sales prices in the markets surveyed by ZipRealty ended 2013 rising 11% over the prior year, cooling off from the 15% to 16% gains seen in the heated summer and fall months. “Overall demand across the 24 metros surveyed by ZipRealty still outweighs supply, with pending sales up 13% and the inventory of homes for sale down 8% year-over-year. Price momentum is lagging in the East, with Baltimore and Long Island sales prices flat year-over-year. Philadelphia saw 1% sales price growth and Boston edged up 5%,” says Lanny Baker, CEO of ZipRealty.

The sold-to-list price ratio also appears to be decelerating: the average ratio dropped to 98.4% as of Dec. 31, 2013. The sold-to-list price ratio remained steady at approximately 99% from May to August 2013, but then slowly trended downward throughout the autumn months.

Sold-to-list price ratios dropped the most year-over-year as of Dec. 31, 2013 in these metros:

1)     Long Island – 96%

2)     Chicago – 96.9%

3)     Philadelphia – 97%

Markets where homes achieved 100% of their full listing price as of year-end 2013 include:

1)     The San Francisco Bay Area

2)     Sacramento

3)     Los Angeles

4)     San Diego

Total housing inventory in the markets surveyed by ZipRealty ended 2013 in negative territory at (8%) year-over-year, with a Midwestern market and two Texas metros showing the greatest declines in inventory as of Dec. 31.

1)     Chicago inventory fell 25%

2)     Houston inventory fell 22%

3)     Dallas inventory fell 21%