Finally seeing an uptick in real estate inventory this week!

Has inventory bottomed for the year? Do we finally start seeing a few more options for buyers? That’s what the data looks like it might be telling us.

Each week Altos Research tracks every home for sale in the country, we analyze 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. Traditional real estate data is released monthly, so by the time it gets to you it’s kinda old news. I’m Mike Simonsen, I’m the CEO of Altos Research. Let’s look at the data and see the details for the week of March 14 2022.

Real Estate Inventory

Let’s start with inventory this week. 249,000 single family homes active unsold on the market now. That’s a 3% jump from the week prior. Nationally inventory is still 21% lower than last year at this time. And this is one datapoint. It’s hopeful, but it isn’t a trend yet. Maybe buyers took a little pause at the onset of the Russian war in Europe. It actually looks mostly like this is a supply side addition rather than a demand change. Anyway it’s early, it’s one datapoint. But it’s a step in the right direction. Last week in our webinar we looked at some local data in places like Sunny Isles Florida which have been dominated by Russian buyers in recent years. We couldn’t see any real uptick in inventory in those markets, but take a look at the webinar from last week, the replay is on our YouTube channel to see what we were looking at.

I’ve been getting anecdotes of more inventory coming on. A viewer in Florida reached out a week ago talking about his local market turning the corner and a customer at a brokerage in Texas mentioned inventory growth as well. I’m always pleased when the anecdotes match the data.

We also have a lot of new construction underway currently. So far this winter the delays in completions due to the supply chain were actively detracting from the inventory. But this week we can can see some rays of sunshine there too with new construction completions adding a little bit to the active inventory.

I pulled some state level data so we could test these anecdotes. This is the first week that Texas inventory has climbed, Georgia ticked up by a tiny fraction, Florida is up just a touch for the second week, New Jersey and Virginia ticked up in available inventory, and here’s the California chart. California inventory has been ticking up for a few weeks, with a nice jump this week. So it looks to me like a good sign of more inventory becoming available nationally.

We’ve been highlighting the last time mortgage rates rose in 2018 as a model for how you might plan for this year. The inventory jump in California from 2018 to 2019 was more pronounced than in the country as a whole. California and many of the sunbelt growth markets may be more sensitive to rising rates than the rest of the country. Something to keep your eye on. California still has less than half the inventory it had just before the pandemic so any increase is a welcome sight.

Immediate Real Estate Sales Tracker

Here’s why this looks like supply increasing rather than demand backing off: Our Immediate Sales tracker. 

• homes that got listed and went into contract essentially immediately
• homes that got listed and took more than a few days to sell

More than a few days jumps to 60,000 homes and the immediate sales also jumped to almost 30,000. More of both of them. Still a third of the market going into contract essentially immediately.

If a weekly climb in inventory were due to weaker demand, then we would see the immediate sales shrinking as a percentage. We’re not seeing that at all yet. Really it looks like the intense demand is pulling more supply onto the market. That’s a really great sign. Like I said, this is one week datapoint. We’ll see if it becomes a trend.

Real Estate Price Data

OK Prices - the median price of a single family home is $399,000 this week. And the median price of the newly listed cohort is $399,999. I’ve pointed out how prices like to cluster right below the big psychological threshold and that’s where we are at the moment. Home prices climbed just over 1% from last week as you’d expect for this time of year. Will we cross $400k next week? That would officially be the new record high for home prices. We plateaued at $399k last summer in the peak weeks, so you have to assume we’ll move above that soon. Maybe next week.

Let’s wrap today with price reductions. With the percent of homes on the market that have taken a price cut recently down to just 16.7% this week, there’s no indication of demand weakening at all. The supply demand imbalance remains unchanged. This is also true in market time, which is still ticking down. Seasonally, we’re at the point of the year when price reductions would normally start climbing a bit. Houses that got listed in January and February have seen their neighbors move fast and are now seeing more inventory competition hit the market. So they start adjusting if they haven’t sold. This year of course everything is selling so very very few price reductions. Last year’s seasonal cycle was extended by a couple months so price reductions didn’t start climbing until May. Maybe we’ll see price reductions turn this year in April if our new inventory move becomes a trend.