Available real estate inventory skyrockets again this week

Available inventory of homes for sale in the US jumped 6.2% this week to 444,000 single family homes active, unsold on the market. Buyers have cooled way off just as we reach the peak of the summer season.

Even though we added 25,000 more homes this week, the market is still 50-70% fewer than normal for this time of year. It was just 2019 we had nearly 1 million homes on the market at the end of June.

The question is how quickly can we get back to those old "normal" levels? If we look at each week's inventory change over time and forecast those change through the end of the year, we can see how we'll likely end 2022 with at least 525,000 homes on the market. Those are big year over year gains, and likely to have year over year gains in 2023 as well. With the right combination of variables could we have 1 million homes on the market next year?

I suspect that it'll take multiple years of higher interest rates, or a big recession to force that many sellers any time soon.

Meanwhile home prices ticked down this week for the first time since January. The median price of single family homes in the US is $453,800 for the week of June 27 2022.

The price of the (leading indicator) newly listed cohort is also down to $419,900. This tells us that we have no more price appreciation this summer. We'll be watching these trends to see if prices fall faster than seasonal expectations in Q3. So far, prices have been sticky even as demand is backing way off.

And we can see demand backing off in the price reductions number, which is also skyrocketing. This week 29% of the homes unsold on the market have had a price cut. Next week will be over 30%, the most since Christmas 2019. I bet we see 40% by this fall. Some sellers are going to be very surprised!

But for those listings priced right, buyers are buying. We still had 20,000 immediate sales this week. Immediate Sales is the term we use for homes that get listed, take offers and go into contract within hours or just a couple days. These are the homes with bidding wars in this hyper-competitive spring. Immediate sales were the defining phenomenon of the pandemic housing boom. At 20,000 now, this is the fewest in any week since February.

As a percentage of the new listings, immediate sales is finally under 20% now. One in five going into contract immediately down from 1 in 3 earlier this year. I expect this percentage to keep falling, even though last year demand accelerated in Q3!

Frankly this trend is encouraging. Fewer crazy bidding wars, slightly longer time on market gives first time home buyers a few more options and less pressure to make hasty decisions.

We've talked about how the pandemic real estate frenzy is over. The questions now are how far will the market correct?

Full details in this week's video. We do these every Monday, so if you want to stay in front of this changing market, follow me here, on Twitter, or subscribe to the Altos Research YouTube channel.

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