Low Inventory Pushing Prices Up In Boston?

Boston has landed near the top of a list of major metro markets across the country where low inventory appears to finally driving up home prices.

Boston comes in No. 11 on the report, having seen the number of homes on the market drop 37 percent over the past year, as of June 19, according to a new report by Movoto Real Estate. (Movoto is an national on-line brokerage whom I am certainly not endorsing but who did an interesting report). During the same period prices of homes on the market in the Hub have risen 11 percent to nearly $300,000.

Here’s an excerpt from Movoto’s report.

We are seeing a gradual increase in the prices of homes in areas that have been most affected by low inventory. This could be an indicator the housing market has finally pulled out of its slump. We’d like to think so.

Here are the two relevant sets of stats taken from the Movoto report. The first shows declining inventory levels in Boston and other major metro markets across country.

• Las Vegas, down 66 percent
• San Francisco, down 65 percent
• Miami, down 62 percent
• Fresno, down 52 percent
• Oakland, down 50 percent
• Long Beach, down 49 percent
• Seattle, down 42 percent
• Mesa, down 41 percent
• Phoenix, down 41 percent
• Portland, down 41 percent
• Boston, down 37 percent

The second set of stats, also from Movoto, shows the rise in list prices in these same cities.

• Las Vegas, up 52 percent
• Phoenix, up 30 percent
• Mesa, up 25 percent
• Miami, up 23 percent
• San Francisco, up 23 percent
• Austin, up 22 percent
• Oakland, up 17 percent
• Seattle, up 14 percent
• Fresno, up 13 percent
• Long Beach, up 12 percent
• Boston, up 11 percent

Combine more buyers with fewer sellers and prices start to go up.

That tried and true  economic law of supply and demand is always the reason why prices go up or down. As I say repeatedly… Empirical data does not lie.