Housing Supply – New Listings up in 2021
NAR reports a dip in new home listings this week, however in many cities, new listings were rising. See NAR’s latest report below on those cities with the most new listings.
New listings were up substantially this year vs last. In Florida in June, new listings rose 21% and in July they were up 12%.
With home construction lagging, threats of rising interest rates, higher mortgage payments, higher home prices, and larger down payments required, it’s nice to see a little good news. Active inventory is drying up however, and new home starts are down too. Demand might be easing.
When you consider how much it costs to build a new home compared the typical home prices and the level of demand, home buyers are baffled at the lack of housing stock available. This most recent issue might be due to Covid supply chain slowdowns, higher building costs, employment insecurity, and consumer sentiment having dropped.
There is uncertainty about the housing market and the stock market and everyone’s starting to be a little more cautious. The erratic behavior of President Biden and new doubt about the $5 Trillion spending bonanza, might be part of it too. As winter sets in, fewer sellers will be listing. And millions have bought their home so demand isn’t what it used to be which may be causing sellers to wait for the spring of 2022.
Despite the price and scarcity of homes for sale, homebuyers are still hopeful that an opportunity will happen and that home prices will fall. While the supply/demand ratio doesn’t support falling home prices, recent events are pulling the plug on big demand.
It appears cities such as Columbus, Ohio, Louisville KY, Cleveland Ohio, Baltimore MD, Austin Texas, Indianapolis IN, and St Louis MO are cities presenting a good opportunity for home buyers.
Right Now, This is Good News for Homebuyers
Good news for homebuyers in the US and Canada is the rising supply of new homes being listed for sale. The housing market is undergoing a period of uncertainty that will moderate prices yet due to a lack of homes for sale, we can rule out a crash or much lower prices.
If seller panic a little during this phase, home buyers may even find some rare opportunities.
While homeowners were holding out for a higher price, the political and economic climate has changed and we may have seen the top of the price curve. There’s a lot of uncertainty, and we could still see record prices next spring, but this fall and winter, new listings will help to keep home prices down.
According to NAR, the median US home price for active listings declined slightly to $380,000 in August from $385,000 in July. The median listing price grew by 8.6% over last year, lower than July’s year over year growth rate of 10.3%. In August, 17.3% of active home listings had a reduced selling price, up 0.7% from 12 months ago. In April, the reduced price rate was only 9%.
Countering the lower price trend is continued record low housing supply, homes for sale, and a home construction sector that may be slowing due to labor and materials shortages. The Covid 19 pandemic continues, and another wave is upon us. In that climate, manufacturing is dampened and of course new home construction suffers.
NAR’s active listing stats show only the Midwest saw a 12.5% increase in listings (compared to 12 months ago) and 6% in Wouth. The overall trend in new listings and discounts is upward. Active home listings are down 30.2% in the south and down 19.2% in the West.
The August jobs report doesn’t bode well for booming economic times either and with 25 million Americans losing their government stimulus checks, we’ll see reduced demand for purchases.
More sellers will be selling their home now, to ensure they get the price they feel their property is worth. That estimated will be reassessed as the winter draws nearer. The next 3 to 6 month forecast is good however for 2022 we’ll likely see a big pickup in demand (post pandemic). The 5 year real estate forecast is more of perplexing issue.
Cities With the Biggest Increases in New MLS Listings
August 2021 Housing Overview by Top 50 Largest Metros
|US City||Median Listing Price||Median Listing Price YoY||Active Listing Count YoY||New Listing Count YoY||Price Reduced Share|
|Louisville/Jefferson County, Ky.-Ind.||$265,000||-7.00%||-6.00%||22.80%||22.90%|
|New Orleans-Metairie, La.||$339,000||4.80%||-6.40%||19.90%||22.50%|
|Austin-Round Rock, Texas||$544,000||36.00%||-28.10%||19.80%||23.80%|
|Milwaukee-Waukesha-West Allis, Wis.||$290,000||-16.20%||4.60%||17.90%||24.20%|
|Kansas City, Mo.-Kan.||$322,000||-6.50%||-7.00%||15.70%||21.20%|
|St. Louis, Mo.-Ill.||$250,000||0.00%||-15.20%||14.10%||18.40%|
|Oklahoma City, Okla.||$280,000||3.60%||-28.20%||12.40%||20.00%|
|Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.||$503,000||-4.20%||17.10%||9.70%||20.00%|
|San Antonio-New Braunfels, Texas||$350,000||11.40%||-31.20%||9.20%||22.50%|
|Tampa-St. Petersburg-Clearwater, Fla.||$360,000||20.00%||-40.70%||8.60%||20.70%|
|Riverside-San Bernardino-Ontario, Calif.||$540,000||17.60%||-7.60%||8.40%||14.60%|
|Houston-The Woodlands-Sugar Land, Texas||$364,000||10.50%||-25.20%||4.40%||22.60%|
|Virginia Beach-Norfolk-Newport News, Va.-N.C.||$310,000||-7.50%||-21.30%||3.70%||15.10%|
|Atlanta-Sandy Springs-Roswell, Ga.||$398,000||12.20%||-32.40%||2.40%||16.30%|
|Las Vegas-Henderson-Paradise, Nev.||$422,000||22.90%||-34.60%||1.90%||17.10%|
|San Jose-Sunnyvale-Santa Clara, Calif.||$1,250,000||4.20%||-20.30%||1.60%||11.80%|
|Buffalo-Cheektowaga-Niagara Falls, N.Y.||$229,000||1.80%||-5.10%||0.30%||15.20%|
|Dallas-Fort Worth-Arlington, Texas||$396,000||10.10%||-37.30%||-0.70%||21.80%|
|Minneapolis-St. Paul-Bloomington, Minn.-Wis.||$355,000||-1.40%||-15.30%||-1.70%||17.90%|
|Los Angeles-Long Beach-Anaheim, Calif.||$975,000||-2.50%||-17.60%||-3.40%||11.60%|
|San Francisco-Oakland-Hayward, Calif.||$993,000||-3.20%||-22.40%||-3.40%||11.10%|
|San Diego-Carlsbad, Calif.||$830,000||6.50%||4.50%||-6.10%||13.20%|
|New York-Newark-Jersey City, N.Y.-N.J.-Pa.||$603,000||-2.70%||-12.90%||-9.70%||10.30%|
|Miami-Fort Lauderdale-West Palm Beach, Fla.||$456,000||12.50%||-46.60%||-10.20%||11.70%|
|Hartford-West Hartford-East Hartford, Conn.||$330,000||10.40%||-55.60%||-12.30%||17.20%|
The final word on the fall housing market outlook is more opportunity for buyers and perhaps bigger reductions in home prices and more price discounts as demand wanes during this Covid outbreak and stimulus payment cutbacks. Home prices should fall during the September to December period.
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