A dearth of buyers and relatively few new
listings are leading to an uptick in homes sitting on the market
longer than a month
(NASDAQ: RDFN) —The share of U.S. homes that were listed for 30
days or longer without going under contract increased 12.5% in July
from a year earlier, according to a new report from Redfin
(redfin.com), the technology-powered real estate brokerage. In
other words, 61.2% of for-sale homes were on the market for at
least 30 days, up from 54.4% a year earlier.
That’s the first year-over-year increase in “stale” housing
supply since the beginning of the pandemic and close to the biggest
uptick in Redfin’s records, which go back to 2012. The only time it
increased more (13.9% YoY) was in April 2020, when the housing
market nearly ground to a halt. For this report, “stale” refers to
homes that were on the market for at least 30 days without going
under contract, according to Redfin data.
Homes staying on the market longer is a reflection of the
housing market slowing in response to 5%-plus mortgage rates and a
shaky economy. Rates shot up quickly in the first half of 2022,
reaching 5.8% in June before dropping slightly to an average of
5.4% in July. It has taken several months of buyers backing off and
sellers rushing to list their homes before the market cools further
to culminate in inventory piling up.
The uptick in stale inventory is one reason why the supply
shortage is easing: The total number of U.S. homes for sale was up
4% year over year in July, the biggest increase since mid-2019.
That’s largely due to homes staying on the market longer; the
number of new listings was down 6%.
“People want to know whether we’ve officially shifted from a
seller’s market to a buyer’s market. While there’s not a clear line
separating those two ideas, homes sitting on the market longer is a
point in buyers’ favor,” said Redfin Deputy Chief Economist Taylor
Marr. “Buyers can take their time making careful decisions about
homes without worrying so much about bidding wars, offering over
the asking price and waiving contingencies. It’s a different story
for sellers, who have spent the last two years hearing about their
neighbors’ homes getting multiple offers the day they go on sale.
Now they need to price lower and get back to the basics of selling
a home, like staging and sprucing up painting, to get buyers’
attention.”
A look at homes staying on the market for over two weeks and
over two months also illustrates the slowing market. The share of
for-sale homes listed for two weeks or longer was up 7.6% year over
year in July (it rose from 74.6% to 80.3%), the second increase
since the beginning of the pandemic (the first was a 0.1% uptick
the previous month) and the biggest on record. And the share of
for-sale homes on the market for 60 days or longer was up 6.8%
(31.4% to 33.5%), the first increase since the beginning of the
pandemic.
Although homes are staying listed longer than they were at the
height of the pandemic homebuying frenzy, time on market is still
historically low. The typical home stayed on the market longer in
2018 and 2019 than now, for instance.
The big year-over-year uptick in stale inventory is likely to
stabilize soon, as it’s partly a reflection of last year’s red-hot
housing market, when homes were selling very quickly. The typical
home went under contract in 15 days in July 2021–close to the
fastest on record–prices hit an all-time high and the total number
of homes for sale dropped to a record low, driven by sub-3%
mortgage rates.
The share of housing supply that was stale was stable before the
pandemic, with any fluctuations largely due to typical seasonal
patterns.
Stale inventory has increased most in Oakland, CA
The share of for-sale Oakland, CA homes sitting on the market
for at least 30 days was up 60.7% year over year in July, the
biggest increase of the 50 most populous U.S. metros. It’s followed
by Phoenix, where the share of stale inventory rose 54.5% year over
year. Next come Austin (50.9%) and a pair of Southern California
metros: Anaheim (49.7%) and Riverside (46.7%). Fort Worth (43.4%),
Dallas (42.9%), Washington, D.C. (42.5%), Sacramento 41.7%) and
Seattle (41.3%) round out the top 10.
More than half of those places–Oakland, Phoenix, Austin,
Anaheim, Riverside, Sacramento and Seattle–are among the 20 housing
markets that cooled fastest in the first half of 2022.
“The market did a 180-degree turn from early spring to late
spring, with buyers backing out because of high mortgage rates. A
lot of sellers are telling me they feel that they’ve missed out on
the hot market,” said Christopher Johns, a Redfin agent in Houston,
where the share of stale inventory rose 10.2% year over year in
July. “I’m reminding prospective sellers that we’re not in a
housing-market crash; it’s a correction. If sellers list their home
for slightly less than they would have five months ago, they’re
still likely to get a solid offer. And my advice to buyers is to
remember that 5% rates aren’t the end of the world; they can always
refinance in the future if rates go down.”
The share of stale inventory declined in just one metro: Fort
Lauderdale, FL, where it was down about 1% year over year in
July.
To read the full report, including a chart and a metro-level
table, please visit:
https://www.redfin.com/news/homes-stale-housing-inventory-july-2022
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220809005407/en/
Redfin Journalist Services: Ally Braun, 206-588-6863
press@redfin.com
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