New Report: More Homes for Sale, But They're Selling Faster in These Cities

NEWS & TRENDING - INVESTING NEWS
Realtor.com’s recent market report shows homebuyers might need to hang tight a little while longer.
Updated May 8, 2024
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Real estate markets have been on quite the roller coaster over the past 18 months, and recent reports show some signs of steadying — and some signs that buyers will still need to weather the storm a bit longer.

Realtor.com's January housing report provides a glimpse into the real-time data of the housing market. While the report reveals promising signs for homebuyers, it also highlights challenges. 

Mortgage rates are slowly falling, making things a bit easier for buyers, but a tight supply, strong labor market, and uncertain Fed rate movements create a mixed bag for the real estate status quo.

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More homes on the market

One of the positive trends identified in the report is the increase in the number of homes actively for sale. Compared to January of last year, there was a notable uptick of 7.9%, marking the third consecutive month of annual inventory growth. However, it's essential to note that while this improvement is significant, the current inventory is still a whopping 39.7% below the typical levels observed in 2017 through 2019.

Breaking down the data by region, the South and Midwest experienced increases of 8.9% and 2.1%, respectively. In contrast, the Northeast (-6.4%) and West (-11.2%) faced declines in actively selling homes. Among the 50 largest metro areas, some notable increases in inventory were observed in:

  • Memphis (28.8%),
  • New Orleans (28.5%)
  • Orlando (27.3%)

Newly listed homes saw a 2.8% increase compared to the previous year, indicating a positive turn in seller activity. However, this improvement is lower than the previous month's growth rate of 9.1%.

Homes are selling faster

While the inventory is on the rise, homes are also selling faster than last year. The typical home spent 69 days on the market last month, a reduction of four days from the same period last year and 16 days less than the average from 2017 to 2019. In the 50 largest metro areas, homes spent an average of 60 days on the market, a decrease of five days from the previous January.

The data further reveals regional variations, with homes in the West seeing the most significant reduction in time on the market by 10 days. Homes in the Midwest and Northeast also experienced shorter durations, decreasing by four days. However, some markets saw increases in time on the market compared to the pre-pandemic period, including:

  • San Francisco (9 days)
  • Seattle (9 days)
  • Denver (7 days)

The reduction in the time homes spend on the market reflects a heightened demand, contributing to a faster-paced selling environment. Yet, this trend is not uniform across all regions, emphasizing the local variations that shape the real estate market.

What about prices?

The median price of homes for sale in January remained relatively stable, showing a modest growth of 1.4% compared to the same period last year. This stability is mostly due to the scarcity of inventory, which continues to drive listing prices upward. Despite the small seasonal decline from December to January, the national median list price stood at $409,500 last month.

The report also highlights a deceleration in the growth of listing prices, which peaked at the beginning of last month. Although prices are still increasing, the rate of growth has slowed, offering a bit of relief for potential homebuyers. The median list price growth rate for active listings in larger metros was 3.9%, with the Northeastern metros experiencing the highest growth rate at 8.2%.

While listing prices continue to grow, the rate of increase has slowed, offering a potential silver lining for homebuyers. The evolving economic landscape, including fluctuating mortgage rates and inflation concerns, adds an element of uncertainty to the market's future trajectory.

Bottom line

Realtor.com's January housing report paints a nuanced picture of the current real estate landscape. The increase in the number of homes for sale and newly listed homes is a positive sign, indicating a gradual recovery from the challenges posed by the pandemic. However, the market is not without its hurdles, as inventory levels still have a long way to go before reaching pre-pandemic levels.

As we navigate through the intricate maze of the housing market, it's essential for both buyers and sellers to stay informed, considering the regional nuances and broader economic factors influencing the real estate landscape. The road ahead may feature a blend of improvements to the status quo, creating a dynamic environment that necessitates adaptability and a keen understanding of the evolving trends. This could make all the difference between living comfortably and needing help to pay your mortgage.

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Author Details

Georgina Tzanetos Georgina Tzanetos is a former financial advisor who has been active in financial media for the past six years. She holds a master's in political economy from NYU, where she studied distressed labor markets.

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