The real estate market has seen a significant shift in recent months, with the supply of homes for sale rising rapidly. According to a report from Realtor.com, active listings in August were up 36% compared to the same month last year, marking the 10th consecutive month of annual growth. However, despite this increase in supply, sellers are beginning to pull back, with fewer new listings in August compared to the previous year.
The growth in supply can be attributed to the fact that homes are remaining on the market for longer periods of time. This trend has led to more price cuts, moderating asking prices, and extended selling times. Buyers and sellers alike are seemingly waiting for further declines, as evidenced by the lower number of applications for home loans compared to the previous year, despite the decrease in mortgage rates.
While supply is on the rise across most cities, some areas are experiencing particularly large gains. For example, Tampa, Florida has seen its inventory increase by more than 90% from a year ago. Similarly, San Diego, Miami, Seattle, and Denver have all seen significant jumps in supply. Regionally, the South has experienced the largest increase in active listings, followed by the West, Midwest, and Northeast.
Impact on Selling Times and Prices
As the supply of homes continues to grow, properties are sitting on the market for longer durations. The typical home spent 53 days on the market in August, up seven days from the previous year. This increased selling time is leading to lower prices, with the share of homes with price reductions rising to 19% in August. The median list price also decreased by 1.3% year over year, although prices are still significantly higher than they were in August 2019.
The real estate market is currently undergoing a noticeable shift, characterized by a surge in supply, longer selling times, and decreasing prices. While these trends may be challenging for sellers, they present opportunities for buyers looking to enter the market. As the market continues to evolve, it will be important for both buyers and sellers to stay informed and adapt to the changing conditions in order to make the most of the current real estate landscape.
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