A recent report from Trulia shows that the supply of for-sale homes was three times higher this spring than in spring 2017, possibly putting pressure on sky-high home prices.
Charlotte, N.C.'s housing market is a prime example of the gap between slowing home sales and rapidly rising home prices driven by tight inventory. The Queen City's inventory increased 1 percent year-over-year this spring, but supply remains constricted. On the other hand, home sales fell about 12 percent YOY in June. CNBC reports that the city's hot market has been urged on by major job growth and an inpouring of Baby Boomers.
The increase is a double-edged sword. Supplies are increasing because sales are slowing, and sales are slowing because prices are so high. In New York City, the median household must spend 65 percent of its income to buy a home, according to Trulia. In Los Angeles, it takes 59 percent. Historically, prices lag sales by a few months, and sales have been slowing this year in most major markets. This housing cycle, however, has so far been unique. The drop in sales is due to the tight supply, and that just pushes prices higher.
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