YES! 26% More Real Estate Listings Y/Y
Great news. The historic low real estate listings inventory level crisis chapter for real estate looks to have come to a close. Perhaps. Q1 of 2024 is now in the books. Now we have a good idea of the trend and can draw conclusions as to what the year might look like. After two years of a slowing residential home market, and record breaking low inventory, Inventory is finally growing 1% per week. As a comparison, last year inventory was declining at this time. Additionally as reported by Mike Simonson of Altos Research, there is a 13% y/y increase this week of homes in transactions.
The mortgage tracking stats wont show similar growth. This is likely due to high interest rates causing home buyers to utilize cash to buy the homes rather than “expensive” loans. NAR reports 33% of transactions are all cash. Consumers will likely get loans on those investments when rates drop, then re invest the cash elsewhere.
Historically Speaking
Last year real estate sales were hampered by a supply constrained market. This year is different and Inventory is up significantly. Currently there are 517,000 SFR’s on the market, 26% more SFR’s on the market than last year at this time.
For context, thats more inventory at this time than 2021, 2022 and 2023 – yet lags significantly behind pre pandemic levels that were near 800k active SFR’s. But this is great news and a fantastic path forward for the real estate industry.
Hot and Cold
Market by market there are significant changes. Some markets are cranking – with prices are growing more than 18%, no 19% in the hottest markets. And where are these HOT markets? #1 is Dayton Ohio 19.9% y/y price increase. #3 is FonduLac Wisconsin 18.6% y/y price increase …. (FWIW the high temperature there this week is 42F) Faaaar from hot.
To play devils advocate, there are also markets that are still concerning. On the COLD side, its hard to use a specific metric to determine “cold”. But I found this data from Norada Real Estate investments interesting. It looks at price stability vs the probability of a home price decline after purchase. Their most risky cities were in the Great Lakes region. Flint, Monroe and Dearborn Michigan, East Stroudsburg PA and Rockford IL.
Prices Up (only a bit)
Year over year, we can see a slow down in price growth. New listings are 5% higher prices nationwide than last year. Currently the average new contract is valued at $393,775.
When combined with the DOJ and SEC news – this puts some in the path of a huge opportunity. Those that own their databases rather then renting leads will come out ahead in this evolving market.
To learn more about how to leverage this time and situation for growth start by getting a free database grade and audit here.
