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Tight Inventory, Steep Price Gains Begin to Wane

Last year's housing market was defined by two distinguishing factors: low inventory and rising prices; but both trends began to ease at the end of the year, according to the latest ""RE/MAX"":http://www.remax.com/ National Housing Report, which tracks Multiple Listing Services (MLS) data in 53 metros across the country.


""Although the national inventory situation remains tight, it appears to be trending in the right direction,"" RE/MAX reported.

December marked the ninth month in a row in which the year-over-year inventory decline was smaller than the previous month.

Inventory dripped 12 percent in December year-over-year, bringing national inventory to 5.9 months of supply, which ""nearly equal to the 6.0 supply that defines a market balanced equally between buyers and sellers,"" according to RE/MAX.

However, a few markets remain largely unbalanced with significantly tighter inventories.

San Francisco, California, holds 1.4 months of supply, followed by Denver, Colorado (2.7 months), Boston, [COLUMN_BREAK]

Massachusetts (2.9 months), Los Angeles, California, (3.0 months), and San Diego, California 93.4 months).

Tight inventory has contributed to the other major trend of 2013: rising home prices.

December marked the 23rd straight month of home price gains on a yearly basis, according to RE/MAX. Home prices rose 11.9 percent nationally year-over-year in December.

However, on a monthly basis, home prices declined 0.9 percent in December, according to RE/MAX data.

Home price gains are widespread with 45 of the 52 metros RE/MAX tracks posting yearly increases in December and 17 reporting double-digit gains.

The national median sales price in December was $185,400, according to RE/MAX.

Home sales also increased steadily over the year last year, and homes spent less time on the market than the year before.

Home prices have increased on a yearly basis for 29 of the past 30 months, according to RE/MAX, and in December 37 of the 52 metros observed experienced rising home sales.

Home sales were up 0.7 percent over the year in December and 4.5 percent over the month.

Home sales rose notably year-over-year in Pittsburgh, Pennsylvania (30.3 percent), Trenton, New Jersey (20.9 percent), and Little Rock, Arkansas (20.6 percent).

The average length of time a home sold in December spent on the market was 73 days, according to RE/MAX, up five days from November but down 11 days from December 2012.

Time on market has remained below 90 days for 19 months as of December.