Old Rules No Longer Apply

Never before have housing markets experienced low interest rates, high unemployment, and a glut of inventory hiding in the shadow.

That’s how Altos Research sees the current market picture and the bottom line is buyers are sellers are in for a constant state of flux and volatility. The rules of yesterday’s market no longer apply.

In its third Mid-Cities Report, Altos reports prices increased in 14 of the 20 markets, and inventory also increased in 12 of the 20 markets. The list of markets with price and inventory increases has been in flux for the past three months.

The Altos 20-City Composite National Report showed signs of a slowing market a few weeks ago. The summer price bump is over and both prices and inventory are declining at the seven-day level. The next few weeks will set the stage for a long, cold winter. There’s nothing on the immediate horizon with employment or the economy that suggests a spike in fall or winter housing market activity, Altos said.

The median price was $256,120 in July, up $7 from $256,113 in June. For comparison, the Altos national composite median price was down 0.16 percent in July, from $450,894 to $450,176. The leaders in the three-month price increases are Boulder (8.23 percent), San Antonio (4.43 percent), and Boise (3.11 percent). Only two markets had decreasing prices over three months. Naples (-2.73 percent) and Dover (-1.25 percent). Boulder had the largest one-month increase in median price, with a 3.67 percent increase.

The largest one-month increase in inventory was Boulder, with a 3.26 percent increase. The largest one-month decrease in inventory was Naples, with a 5.32 percent decrease. Naples also had the largest three-month decrease in inventory (-10.95 percent). Eight of the 20 markets reported a decrease in inventory and six of the 20 markets reported a decrease in median prices. The 7-day numbers have been declining and 90-day averages in the mid-cities composite are flattening for median prices and inventory.