Forecast Reveals Months of Remaining Housing Inventory Drops 12 Percent

In 200 housing markets in the U.S., the weighted average months of remaining inventory (MRI) data point average dropped lower in June 2015, declining more than 12 percent from the same time last year.

According to U.S. ProTeck Valuation Serivices' Home Value Forecast (HVF), the MRI as of June 2015 stands at 6.11 months, while last year, this average was 6.97 months.

"Home Value Forecast believes all real estate is local and that national numbers mean little when you are buying or selling in a particular market," said Tom O'Grady, CEO of Pro Teck Valuation Services. "Although the national trend seems promising, it's important to evaluate fundamentals at the metro level."

O'Grady added that MRI is a reflection of supply and demand in a local real estate market–with a low MRI signifying a "seller's market" and high MRI a "buyer's market."

The forecast examines the difference in MRI outliers, including metros areas with less than 4 MRI, which the report labels "hotter" markets, as well as those with over 10 MRI as "cold" markets. The report points out that the number of hot markets have increased 45 percent and the number of 10+ MRI areas have decreased 36 percent from the same time last year.

The top and bottom 10 MRI CBSAs were also reviewed for this month, finding that eight of the top ten markets with lowest MRIs are in California as the West Coast regions continue to be hot. San Francisco, California lead the group with MRI of 1.51. The East Coast and rural CBSAs have the highest MRI numbers right now with Duluth, Minnesota-Wisconsin rounding out the bottom with 35.09 MRI.

"Home Value Forecast data shows that there was an increase in the number of strong markets, while the number of weak or distressed markets decreased," said O'Grady. "While there is still work to be done and there are still communities suffering, the overall health of the U.S. housing market has improved."

The HVF also labeled the best and worst metros by examining real estate market indicators such as sales/listing activity and prices, months of remaining inventory (MRI), days on market (DOM), sold-to-list price ratio and foreclosure percentage, and REO activity.

"The Western states continue to dominate the top ten with Bellingham, Phoenix and San Antonio rejoining the list. Interestingly there are fewer California markets on this list this month," said O'Grady. "Continuing on the theme of this month's updates, all of the top ten MRIs are less than 3.5."

"The bottom ten list is virtually unchanged from last month," said O'Grady. "These communities continue to be plagued by higher percentages of foreclosure sales and higher MRI. Atlantic City, NJ and Jacksonville, NC are seeing MRI over 10 months."

 

 

Click here to view ProTeck's Home Value Forecast.