A true data geek, Mike founded Altos Research in 2006 to bring data and insight on the U.S. housing market to those who need it most. The company now serves the largest Wall Street investment firms, banks, and tens of thousands of real estate professionals around the country.
The Thanksgiving holiday week is baked into the data now and it sure looks like the market is accelerating from where it was earlier in the fall. There are seasonal and holiday variables to work through here, but as of early December signs for the 2022 housing market are looking bullish. On our way to record low supply, no signs anywhere of demand abating.
Each week Altos Research tracks every home for sale in the country, all the pricing, supply and demand, and all the changes in that data and we make it available to you before you see it in the traditional channels.
It’s Monday December 6 2021. Here’s what the real estate market is telling us this week: Active inventory of unsold single family homes this week dropped a big chunk due to the Thanksgiving holiday to only 350,000 existing single family homes. As we’ve been tracking recently, we’ll end the year with just under 300,000 homes available. That’s less that the lowest point of the year.
Since there is no driver for new inventory to hit the market, we can see how next year’s first and second quarter are shaping up to be another really competitive season for buyers. We hit a low of 307,000 single family homes on the market in April of this year, which was much later than normal. We’ll hit under 300k by the first week of January 2022.
Supply will remain around record lows all year. By the way we have so much of these leading indicators for the 2022 market to explore in more depth next week in our December webinar. We’ll be exploring impact of mortgage rates, opportunities for first time home buyers and other ways to forecast what to expect in the US housing market in 2022. Wednesday December 15 at 10 am Pacific. If you are trying to make sense of all the headlines, you have buyer and seller clients who need to know how to prepare for 2022, this is for you. These monthly Altos webinars have been terrific, the hundreds of realtors, brokers, investors and economists who join each month have made for a really dynamic conversation.
When we look at supply and demand through the lens of our immediate sales tracker we see the holiday very pronounced of course. New listings will rebound a bit in this week’s data, but volume stays low until later in January. Percentage wise those properties that are listing, and taking offers essentially immediately is staying elevated with 17,000 homes going into contract essentially immediately after listing.
We’re past the annual peak of price reductions. Remember when we look at the percent of homes on the market that have taken price reductions recently, there are always some. Many sellers insist that if you didn’t take at least one price cut, you under priced. Normal range for price reductions is about 35% of the market nationally. Price reductions accelerate in the fall for sellers who want to move the house before the holidays. By December we’re past the peak of price cuts as those who are still on the market have already cut their price and will hang out past the holidays.
Some properties that were overpriced will be withdrawn so that brings this number down. Again this is all normal seasonal behavior. Right now 27% of the homes on the market have had a price cut. That’s falling each week as normal. You can really see where the sellers were surprised by December demand last year. We had no seasonality. People just kept on buying right through the holidays.
Market time always slows around the holidays of course. But this year we’re still at half the time on market as homes usually spend this time of year. Normally you’d expect 85-100 days on market around the holidays. But right now we’re at 49 days median across the country. Days on market is actually lower than last December.
You can see the very strong seasonal patterns shows us that next spring it’s going to be competitive again. Days on market peaks just after the start of the year, then new spring inventory and buyers emerge and the cycle resets again. As of right now, it looks like we’ll hit our record lows again in the second quarter next year.
That brings us to pricing. Median price of a single family home in the US dipped last week with the Thanksgiving holiday to $375,000. This is one area where you can see last year’s unseasonal strength makes annual comparisons tricky.
Last year home sellers in December were surprised how many buyers were lining up and bidding on the few available listings. We were peak pandemic and everything was new territory. Normally you get big drops in prices over the holidays, but last year those dips were much smaller. Buyers were in bidding wars and the new listings prices were staying elevated as a result. We saw that same dynamic in the price reductions chart earlier.
This year we have a more normal Thanksgiving price adjustment. The median price of the new listings this week dropped to $329,990 and will drop again over the Christmas week before rebounding the second week of January. Our 10% annual price gains looks pretty clear as we wrap up 2021.
OK that’s the data we have time for this week. As I mentioned, registration for next week’s webinar is now open. If you need to know how the market is set up for 2022, if you have clients or dollars at stake, you should join us. And of course to get Altos data and market reports for your local markets, we track every zip code in the country, to get yours, click the link to AltosResearch.com run a report, book time with our team. Don’t get caught off guard. It’s going to be a wild year.