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Kathryn Carlson's Blog

By Kathryn Carlson | Broker in 80209

Inventory Deficit Continues to Ratchet Up Home Prices

 

by Broderick Perkins

Buyers just can't get a break from the recovering housing market.

The spring buying season typically brings a larger supply of homes to market because sellers and buyers typically want to move on well before the fall school season gets underway.

The more accommodating weather also provides optimal times for showing homes.

A larger inventory helps bring prices down and offers more homes to comparison shop.

Alas, inventories in March 2013, compared to March 2012, fell by about 21 percent across all the 38 major metropolitan areas tracked by Movoto.com.

The short supply is putting heavy pressure on prices to rise - out of reach for some buyers. Thirty of the 38 cities Movoto tracks witnessed an average annual 11.5 percent increase in list price per square foot.

That's astounding price growth given home prices typically grow at about the rate of inflation, which is now about 2 percent, according to the . Bureau of Labor Statistics

Greatest inventory plunges

California cities saw the greatest declines in inventories.

• In Oakland, inventories dropped by 81.1 percent. At the end of March 2013, there were 151 homes for sale, as opposed to 797 the year before. The average price per square foot rose 21.2 percent during the same period.

• In Sacramento, California's capital city, inventories dropped by 70.6 percent. In March 2012, there were 2,863 homes on the market. Over the past 12 months this number dropped to 843. Sacramento home prices led in price gains, with a 35.5 percent increase in the average price per square foot.

• In Long Beach, the stock of homes for sale dropped by 51.3 percent. In March 2012, there were 844 homes on the market. Twelve months later there were 411 homes on the market. During the same time prices rose 18 percent per square foot.

Inventories aren't just down from a year ago. They've been falling since 2011.

In March this year, the number of homes for sale was 98,336, down from 124,808 in 2012 and 181,402 in 2011.

Largest price increases

Two of the three cities with the greatest increase in price per square foot were also in California.

In Sacramento, the cost of a home, on a square foot basis, increased by 35.5 percent. Last year, homes were valued at $89 per square foot. By the end of March 2013, homes were valued at $138 per square foot.

In Atlanta the price jumped by $34, or 24.1 percent. A year ago, the price per square foot was $107. Since then the price has increased to $141 per square foot.

In Los Angeles the cost per square foot for a home in the City of Angles was $378, up by 23.5 percent from the year prior. At the same time in 2012, homes were valued at $289 per square foot.

Published: April 23, 2013

 
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