New Listings Down Over 20% as Shortage Prevents Further Price Falls

According to Redfin, a decline in new home listings of 22.4% year over year has resulted in a general scarcity of inventory. Despite higher mortgage rates, nearly half of homes on the market sell within two weeks. The typical house sale price is falling 2.8% year over year countrywide, with some regions witnessing steeper drops than others. In the 50 US metro areas with the highest population, pending home sales are down 16.7% overall, and new listings are down year over year. The average sale-to-list price ratio was 99.1%, and 30% of properties sold for more than their final list price.

The areas experiencing the most significant price drops are Austin, TX, Los Angeles, San Francisco, Anaheim, and Sacramento, CA. In contrast, areas with the most substantial price increases are Fort Lauderdale, FL, Miami, Cleveland, Cincinnati, and Columbus, OH.

New Home Sales Up by 9.6% in March

New home sales rose 9.6% to a seasonally adjusted annual rate of 683,000 in March, the fourth consecutive monthly increase, according to data from the US Census Bureau and the Department of Housing and Urban Development. However, sales were still 3.4% lower than last year’s period.

“The backlog of new construction homes from the building boom across 2021 is working its way to the market, offering fresh listings for buyers who are facing more competition on fewer homes,” Nicole Bachaud, Zillow’s senior economist, said in a statement.

The median sale price increased to $449,800 from $438,000 in February, while the number of unsold new homes fell to 432,000 from 436,000. All regions, except the Northeast, experienced annual drops in sales pace, with the Midwest recording the most significant decrease at 11.3%.

Pending Home Sales Fall 5.2% in March

According to data from the National Association of Realtors, limited housing supply not meeting demand caused pending home sales to decline by 5.2% month over month in March, the first decline since November 2022. Due to the monthly fall, the Pending Home Sales Index registered a reading of 78.9, down 23.3% from the prior year.

“The lack of housing inventory is a major constraint to rising sales,” Lawrence Yun, NAR’s chief economist, said in a statement. “Multiple offers are still occurring on about a third of all listings, and 28% of homes are selling above list price. Limited housing supply is simply not meeting demand nationally.”

NAR expects existing home sales to improve steadily in the coming months, with a 15.4% annual increase anticipated in 2024 to bring existing home sales back up to 5.26 million. The trade organization also predicts sales in the new construction sector to increase by 4.5% year over year in 2023, with the national median price of existing homes expected to stabilize.

 

 

Source:

Vaimberg, Ron. “Weekly Newsletter – January 6, 2023.” Ron Vaimberg International, Ron Vaimberg, 6 Jan. 2023, https://rvionline.thinkific.com/courses/take/rvi-weekly-newsletter/texts/41523497-weekly-newsletter-january-6-2023.