The supply of homes for sale in Southern California crept up in May, another sign that the region's housing market is stabilizing. But it remains at less than full health.
If sales continue at the current pace, all listings on the market in metro Los Angeles in May would sell out in 3.9 months, according to figures from the California Assn. of Realtors. That's up from 3.8 months' worth of supply in April. Inventory in the Inland Empire also edged up, to 4.3 months from 4.2.
Both figures remain well ahead of last May's levels – 2.7 months in the Los Angeles market and 2.8 in the Inland Empire – but also well below the six months supply that housing economists consider healthy. New listings are increasing faster than sales, but only slightly.
Tight inventory has been a big factor in driving up home prices over the last year, and market-watchers are looking for signs this spring that regular move-up buyers are trickling back into the market, putting their old houses up for sale and buying new ones.
They are, a bit. Hence the higher inventory numbers. But higher prices have slowed the market too, said C.A.R. President Kevin Brown.
"Since last summer the market has been transitioning to a slower pace of sales, somewhat higher inventory and less upward pressure on prices," he said. "Generally speaking, buyers are feeling less urgency to buy as affordability has become more of an issue and lending standards continue to remain tight."
C.A.R.'s numbers echo figures last week from DataQuick, showing home prices up 11.9% in metro Los Angeles compared to May 2013, and the volume of sales down 11.8%. Both prices and sales grew from April to May, as often happens as the spring market picks up speed.