The inventory drought that has driven price increases this spring is ending as new listings restore supplies.  Larger inventories, especially in the hotter markets that experienced rapid price increases in the spring, are providing buyers more choices and moderating price increases.

Realtor.com’s year over year inventory declined 5.24 percent for the second month in a row.  However inventories were up 1.41 percent over June.  National median list prices increased 5.27 percent year-over-year while median age of inventory fell 16.67 percent.

The very hot California markets that were a concern two months ago have cooled.  In fact, inventories have recovered so much in Sacramento and Stockton-Lodi that their supplies of listings for sale on Realtor.com are larger than they were a year ago.  The recovery’s new phase is characterized by smaller price swings, larger inventories that reflect higher home values, a moderate decline in the median age of inventory and a general return to stability.  The balance of the year will see markets consolidate the price gains they achieved during the buying season.

Dramatic national year-over-year inventory declines have evaporated. Nationally inventories in July are only 5.24 percent below the level of a year ago compared to being down 16.47 percent year-over-year in January.

Inventory declines decreased in local markets.  In July 2013, the number of markets with decreases in year-over-year inventory declined from 125 markets in June to 118 markets in July.  This suggests that this fall inventories in some markets may return to levels of a year ago and may continue to slow price increases in some markets.

Markets are still moving fast. All but five markets are continuing to experience year-over-year declines in age of inventory and on a month-over-month basis. On a national level, housing inventory is approximately 17 percent below last year, but the national age of inventory increased 6.25 percent month-over-month.

read more…

http://www.realestateeconomywatch.com/2013/08/realtorcom-reports-price-increases-are-moderating/