The number of homes for sale last month fell 17% year-over-year in the nation's leading housing markets, yet median list prices remained flat, new data show.
The flattening of list prices - which foreshadow sale prices - may indicate a weakening in demand given the nascent housing recovery, says Steven Berkowitz, CEO of Move, which operates the Realtor.com website.
"There's a little bit of uncertainty that's come back into the market," Berkowitz says. Concerns over the outcome of the presidential election and tax and spending-cut issues may have weighed on prices, he adds.
Given tightened supplies of homes for sale, Berkowitz expected October list prices to be up year-over-year, as they were in eight of the previous nine months.
Other companies that track asking prices do show annual increases for October. Trulia's data show asking prices up 2.9% for the month year-over-year. That was the biggest annual increase of the year. The increases were also broad, occurring in 69 of 100 major markets.
"We see no slowdown," says Jed Kolko, Trulia economist.
On a year-over-year basis, the for-sale inventory declined in all but five of the 146 markets covered by Realtor.com. List prices increased in 71 of the markets.
Both data trackers see prices rising faster in markets where inventories have shrunk the most.
In 44 of 146 Realtor.com markets, the number of homes for sale shrank more than 20% year-over-year.
In 14 of those markets, list prices were up year-over-year by more than 10%, the data show.
Many of the markets with the biggest drops in inventory are in California. In Stockton and Sacramento - two Central Valley cities hit hard by foreclosures - for-sale inventories were down by more than 60% year-over-year, Realtor.com says.
List prices were up just 6.5% year-over-year in Stockton. But they soared 31% in Sacramento. Competition for Sacramento-area homes is especially tight in the lower price ranges, where investors are scooping up homes to turn them into rentals.
But higher-priced homes are also in demand. Anything under $300,000 is seeing multiple offers, says Sacramento-area Realtor Rob Baxley of Lyon Real Estate.
Outside of California, cities seeing big drops in inventory include Seattle, down 40%; Atlanta, down 37%; and Jersey City, N.J., down 32%.
Not all markets with shrinking inventories are getting bounces in listing prices.
For October, median list prices were flat year-over-year in Buffalo, N.Y., and Akron, Ohio even though inventories were down 20% and 22% respectively, Realtor.com says.
Only 5 markets showed inventories expanding. They included Shreveport, La., where inventories swelled by 14%, and Philadelphia, up 6%.
While tightened supplies have helped home prices much of the year, they'll also help home builders, says economist Pat Newport of IHS Global Insight.
The nation's homeowner vacancy rate fell to its lowest level in seven years in the third quarter, he says. That indicates that "builders are going to have to ramp up," Newport says. "We've gotten rid of all of the excess supply."