The spring homebuying and selling season is off to a tepid start.
The local housing market, which was sizzling last summer, still had a bit of a winter hangover during March – typically the start of the housing market’s seasonal upswing, according to new data from the Buffalo Niagara Association of Realtors.
Home sales were down and fewer homes went up for sale. At the same time, median prices rose modestly, even though the supply of homes for sale remained limited.
Even so, the fundamentals of the housing market remain squarely tilted in favor of sellers, with only enough homes on the market to absorb 2.4 months worth of sales at the current pace. A housing market is generally considered to be in balance between buyers and sellers when there is a six-month supply of homes of sale.
Median sale prices have come down from the all-time highs that they hit in late spring last year, but the overall trend in prices continues to be upward.
Despite a more than 20-year low in the number of homes for sale, the reduced choices among buyers only led to a modest 3.6 percent increase in the March median sale price, which rose to $142,500. While that was a record high for March, it was the smallest year-over-year increase in home prices since last August.
With buyers scrambling for a small supply of homes, the pace of home sales has been slowing for two straight years.
After falling by 1.6 percent during 2017, home sales dropped by 2 percent last year, based on revised data from the real estate trade group. The trend continued into March, with sales over the preceding 12 months down by 3.7 percent.
The number of homes for sale fell by 1 percent last month – resuming a seven-year decline in inventory that had been briefly interrupted by a small uptick in listings during January. New listings, which were down 4 percent last year, fell by 3 percent, after dropping by 7 in February.
Homes still are selling briskly in a market with low inventory and mortgage rates still relatively low. The average home that sold during March was on the market for 55 days, one day more than during March 2018 but 16 days faster than 2016.
Home sellers also are able to hold fairly firm to their asking price. The average home that sold last month went for 97.6 percent of its most recent asking price.