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the latest ORIGINATION Or ig i nat ion April Inventory Shows Evidence of Rebound More houses are becoming available, according to recent report. Positive gains haven't been strong enough to lift the cloud covering the market, which could benefit recovery long-term. for sale is selling quickly and, in fact, the first quarter of the year was one of the best ever." However, Hicks noted that HomeVestor franchisees have reported an increase in buyer reluctance for the homes being put on the market. Would-be buyers seem especially reluctant in areas where prices have increased significantly, Hick says—largely because they're not certain of the market's stability and want to avoid overpaying. Also worth noting is the current shortage of inventory, which has boosted price points and helped to drive off the sort of speculative buying behavior that could generate a bubble. Even so, low appraisals, tough financing criteria, and buyer and seller reluctance have provided a balancing weight. "Prices have not yet risen at the pace of demand," Hicks observed. "We would have expected prices to rise higher than they actually have." se c on da r y m a r k e t G ains in home prices during the last year haven't provided enough lift to offset the headwinds holding the recovery down—and that's a good thing, says David Hicks, co-president of Dallas-based HomeVestors. While reluctance from lenders, sellers, and appraisers has become something of a drag on sales and price improvements, Hicks asserts the market's slow growth has kept the country away from another housing bubble. "At the price point of the market we generally service, typically at or below the median price, securing a fair appraisal and financing are typically the major challenges our franchisees face when selling a property," Hicks said. "Since we focus on 'ugly houses' that owners are anxious to sell, we're not as affected by seller reluctance as is the general market. Everything our franchisees have reported double-digit gains, including Honolulu, Hawaii (53.2 percent); Burlington, Vermont (40.3 percent); Albuquerque, New Mexico (40.2 percent); Charlotte, North Carolina (39.4 percent); and Raleigh and Durham, North Carolina (38.1 percent). Meanwhile, the median price for all homes sold in April was $177,200, a 4.7 percent monthly increase and a 10.7 percent yearly rise. April marks the 15th month in which the national median price has risen on an annual basis. Of the 52 areas surveyed, only four posted year-over-year declines in median price: Los Angeles, California (-9.1 percent); Albuquerque, New Mexico (-6.3 percent); Cleveland, Ohio (-1.8 percent); and Providence, Rhode Island (-0.3 percent). Out of the remaining 42 metros, 21 reported double-digit price gains. "April was exactly what we a na ly t ic s Are Housing Headwinds Actually a Blessing? hile low inventory continues to curb home sales, April may have seen the first signs that the supply situation is turning around, RE/MAX says in its latest National Housing Report. According to RE/MAX's numbers, taken from a survey of multiple listing service (MLS) data from 52 U.S. metro areas, the supply of homes for sale at April's sales pace was 3.6 months—the lowest supply since the National Housing Report began in August 2008. (RE/MAX considers a balanced supply to be six months.) However, the company observed a 1.6 percent monthly increase in April in the overall number of homes for sale—the first jump since June 2010. In addition, the year-over-year percentage drop in inventory was 26.6 percent, the lowest annual decrease in the last 12 months, perhaps marking a turning point for housing supply. "Low inventories contribute to a limited growth in sales, preventing some buyers from closing on the home of their choice. But if inventories can rise to a more balanced level, the recovery should strengthen and experience even more home sales," RE/MAX said in its report. At the same time, closed transactions and prices continued to rise on both a monthly and yearly basis. April's report shows an 8.1 percent increase in closed transactions over March and a 10.5 percent increase over April 2012. Agents reporting to RE/MAX are noting increased traffic and say they expect the summer selling season to be even stronger than last year's. Of the 52 areas surveyed in April, 41 reported higher sales volume than April 2012, and 25 s e r v ic i ng W "April was exactly what we needed at this time in the housing recovery." — Margaret Kelly, RE/MAX needed at this time in the housing recovery. Home sales and prices continued to rise, while we started to see improvement in the number of homes for sale," said Margaret Kelly, CEO of RE/MAX. "It may take a few months, but as prices rise and more homeowners gain positive equity, we should see an increase in the inventory of homes for sale, resulting in a much better selection for potential homebuyers." The average days on market for all homes sold in April was 77, eight days fewer than March and 19 days fewer than April 2012, RE/ MAX reported. The M Report | 39