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.
So the world's financial markets are in turmoil. Stock markets are way down from their peak interest rates are rising. We have inflation and we have fears of future inflation, the crypto markets are a total blood bath.
The big question is: is there any way that real estate avoids all this chaos? And how do we communicate with buyers and sellers right now? They know these conditions, but frankly, we still have bidding wars on many homes, in many parts of the country right now, my brother this week lost to a higher bid on a home in Pennsylvania, just last Sunday.
So how do we reconcile both of these conditions? What questions can you be asking your clients about their expectations and their needs to help set their frame for whether it's a good time to make a confident decision buying or selling their home?
I'm Mike Simonsen, I'm the CEO of Altos Research. And every week Altos Research does the analytics on all the real estate pricing and all the supply and demand. We do the changes in that data, and then we make it available to you before you see it in the traditional channels and for the Realtors. And for the professionals on this call today, this is how you can be helping your clients through the fears that they have right now.
So much uncertainty in this market. So much fear is happening and the data is really how we get people past the fears.
We have we have a lot of people, 1300 people registered for the webinar today, all over the country. I have a lot of data to share.
So let's look at the agenda for today. What do we really look for? What stats can we watch in a shifting housing market? Well inventory numbers and price reduction numbers have been really leading our headlines the last few weeks. So we'll spend some time with both inventory and price reductions. We're going to look locally at these as well, and see some of the markets that are changing most quickly and the ones that are a little more resilient at the moment. What else we can look for and how to talk about it with our clients?
A big question is: will home prices fall? What do we know about that right now? What does the data show us right now about the future of home prices and the future of inventory levels? So those are the ideas we're going to get to. We will finish up the session with local market data as we normally do.
We can't get to all local markets, of course. So you can always book time with our team or a free local market review. You can review with our team, how to use the market data, how to talk about the market data, the questions to ask with your clients right now. So keep a look out for that.
Let's start today with a big headline: interest rates, mortgage rates on the 30 year mortgage have spiked up to over 6% this week. The fed is raising its borrowing rates. And while mortgage rates aren't directly correlated to what the fed does, they're more correlated to the expectations of what the fed will need to do. And what happened last Friday was we had inflation numbers that were higher than expected, and all of a sudden the people like the mortgage buyers recognize it in the future. The fed is probably going to have to raise interest rates even more to control inflation and therefore mortgage rates spiked before the fed did anything; really on the expectations.
We've been around 4% for a decade. The last couple years, we've been under 3%. And everybody knows that cheap money has provided a really good incentive to buy homes. As rates are now over six, that has to have an impact on demand.
I actually have a question. I have a little poll today. I'm interested in your take. So I'm going to launch a little poll. You can vote on this poll. It's a multiple choice. I'm just curious to see how have rising mortgage rates impacted your business. Are your buyers still going full strength? Are people telling you that they can't afford to buy?
Some people are trying to get out quickly. Are some sellers scared and are they holding off? We've got a lot of people, I'm going to let people vote and we're going to see how that share comes out. I will share the results in just a minute. We know that these rates are there. And the question is how are people seeing it?
Like I mentioned at the start, my brother just made an offer on a house in Pennsylvania. He has a life event change. They are moving closer to his wife's parents to take care of them as they age. So it's time for them to move. They need to buy a house and they're buying a house. So they're making an offer. And what was interesting is that they lost. Somebody overbid them and they lost on a competitive offer this weekend.
So I'm going to share our results of our poll real quick. The biggest trend here, many of my buyers now can't afford to buy. And so that is the "demand destruction" that rising rates has on the market.
Many of our buyers are still buying. This is like my brother. And so a lot of activity is still happening, we can definitely see many of the buyers now can't afford. And so that's slowing us down and we can see it in the data all over the place. This is the shift. We have definitely shifted from the hot frenzy market to a much more normal market. Then here on the supply side, I now have sellers eager to get out before the market gets even worse.
Right. So we can see the demand decreasing and supply increasing as a result of rising rates. Like it's a fascinating time for us. That dynamic is kicking in strong.
In this case, we have rising rates. As I say I don't have any ability to predict where rates will go. Rates stayed lower way longer than I expected them to. And then when they started rising, they jumped way faster, way higher than I expected to. If you listen to our Top of Mind podcast, I had some folks on earlier in this year, like in January who were expecting four and half percent very quickly.
Here's our poll results. This is where I was saying we have buyers still buying but you can see the demand destruction. Many of our buyers now can't afford to buy. That's the biggest one. And here is our supply coming on, new sellers eager to get out. So we have demand weakening and supply increasing. Lower numbers are people waiting to sell because they're worried, although there are a lot people still buying. So there's our results of the poll.
Okay. So let's move on. We know that rates are up. I don't have any ability to predict where rates will go. Is this a temporary spike? Do they go higher from here? We don't know if I knew I'd be trading in interest rates, not doing real estate market data.
But as of right now, we know this is having a really dramatic impact. So where do we see the impact? The first place we can see is in inventory numbers. There are 396,000 active homes for sale unsold on the market, single family, as of last Friday. That's up five and a half percent from the week before, climbing very steeply but still very far below where normal is. Even in say, 2019, this time of year, we'd have just under a million homes on the market, single family homes on the market. And we only have 400,000 right now. So this is why we see the market slowing.
We have buyers who can't buy, we still have bidding wars because there are too few homes on the market. Way fewer than normal, so that you know, we're going 90 miles an hour and we took our foot off the gas. We're still going very fast. We're slowing now.
Couple other things to note about the inventory over the last decade. Each year we tend to have fewer and fewer homes available on the active market. That's for a couple of reasons. One is that we have, as Americans, turned homes from resale into investment rental properties. Sometimes we do that because when we move to the next home, we keep the first one for a rental unit. And now we have just one rental unit. Sometimes it's small investors buying one to four units as rental units. And some of it is big institutional money buying a lot of homes. The rental units are owned by individuals and, you know, less than 10% are owned by big corporations are the big hedge funds, but it's all Americans and we've been doing it every year. As mortgage rates have been really low. It's been a really good time to have a cheaply financed, nice cash flowing investment unit. The summer peak year keeps falling.
The only time inventory rose, year over year, was in 2019 from 2018. In 2018 we had rising rates. So rates rose from 3.9 to 4.9% during 2018. And as a result, we started 2019 with more inventory than the year before.
What we have right now is year over year inventory gains again. So rates rose, we have year over year inventory gains. And so we're at 396,000 versus 342,000 last year. And so those inventory gains are an unusual condition for us in the USA.
We're still low, but they're gaining and they're going to continue to gain, likely through September, before we start seeing the seasonal drop off in inventory for the end of the year. We're going to end the year with more inventory than we ended 2021.
One of the implications of that is, year over year, inventory gains are correlated with flat pricing a year further out in the future. So year over year, when inventory falls, that's correlated with pricing increasing the following year, when inventory gains that's correlated with inventory flat or falling in the following year.
What this implies is that we can see for 2023 likely no home price appreciation across the country in 2023. We don't see any conditions in the data for massive home price declines, or notable home price crash. There's no crash signals in the data. The only places that you might see crash signals are in all the other financial markets. That's something to keep in mind, but there's no place in the housing data yet where you see anything that is a crash. For example, we'd have to have inventory climb way back up to a million homes to even be normal.
So there's a long way from anything that's super crashy, but we had these big home price gains because we had these big year over year inventory declines. A lot fewer supply, a lot more demand: that's led to the price increase. So that's one thing the current inventory situation tells us about price appreciation for 2023.
Here's how we can look at inventory in a forecast. In 2018 rates were rising and we finished the year with higher inventory. It started the year lower than most of the previous years. And it ends the year a little bit higher. That was the impact of going from 3.9 to 4.9%.
We're going now from 3% to 6.5%. And so a much bigger inventory gain for the year. We're going to be ending the year with 470,000 or so, that is the current forecast. The inventory gains weekly have been very steep, so probably ending with the highest inventory of the anywhere in the last two years. So that's what the forecast looks like.
I have up for you a on the Altos Advanced Analytics system. I have all 50 states ranked and with the spark line. This spark line shows the trend of inventory of the last year. It's ranked by the most inventory we have: Texas is the most California's next. Even though California's a lot more people, Texas has more homes for sale, which is why Texas is more affordable. You can see that CA with using the spark line is really cool because you can see that California started climbing inventory on January 1st, where Texas didn't start climbing until March. Here's another thing you can see, look at the steepness of the climb in Florida, for example. And so that's really April before it started turning the corner. Florida now has its highest inventory in the last two years as does California last year, Texas still has a little bit to go.
So that's showing is that Florida hitting the brakes faster than some of the other states. If we look through these really quickly, you can see places like the Northeast, Pennsylvania, New Jersey inventories climbing, but more slowly. Look at Arizona. So Arizona had really low inventory and is now climbing very quickly.
And you can see that in the spark line, South Carolina climbing very quickly, if we keep scrolling down here's Colorado. So all of the hot markets that we've seen, we can see them adjusting. Idaho is the one that I'm keeping my eye on most closely. And we'll look at Boise when we look at the local markets in a little bit.
You can use the spark lines for that as really a fascinating time to see which of the markets are adjusting more rapidly. In New York, for example, there's a lot of homes for sale, but it hasn't really turned that corner the way Florida has. You can see the steepness, the comparison there. So that's looking at the state level inventory.
We are at record home prices across the country. The median price of single family homes in the US is $450,000. Now it's June. It's always the peak of the year. Each year has a summer peak and a little plateau before prices recede a little bit in the fall for the holidays. So, you know, if you need to sell your house in November, you price it at a little discount to make sure that it moves. So prices recede a little bit each year, you have that annual cycle and we're at the peak.
Prices tend to cluster around the big round numbers. So 450,000 is exactly where we're clustered right now. Last summer, it was 400. And so what this shows us is lots of equity gains sellers who. So even if you are selling your home right now and the market is slower than you were expecting, you still have a lot of equity and still have a lot of leeway to price the property properly so that it can sell. So we expect this to be along this summer plateau for a while and then start receding.
What I would expect is that we're going to end the year higher than the previous year. And then next spring, because we've had the year over year inventory gains, I mentioned, isn't going to be nearly this steep. And so we're going to end, and we're going to be roughly around the same peak next summer.
I'm expecting zero, essentially, no home price appreciation for the year 2023, based on what we can see in inventory rate.
The price of new listings peaks and plateaus each year before the full market, and it peaks lower because you have a little turnover at the lower end of the market, faster turnover at the lower end of the market. This remained very strong until April.
We're at our plateau, and the new listings prices haven't started ticking down yet extraordinarily fast. For example, there's no signal in the new listings prices that bidding wars are gone and therefore we have to cut our new listings prices. The price cuts are the ones that are most overpriced. People are still buying the ones that are properly priced and you can really see it in this price of new listings. If demand were really dropping, then you'd start to, we'll start to see it fall faster and steeper. Depending on what happens with the economy and mortgage rates, we could still see that later this year. As of right now, there's nothing in the data that shows a deeper crash.
But the other really big headline right now, and it's a really important topic to be discussing with your sellers, is the percentage of homes on the market with price reductions. Price reductions are climbing more rapidly than they have anytime since we've been tracking it.
25.5% of homes on the market right now have had price reductions. In March, it turned the corner. And we said, that's when rates started climbing. That's when the market changes really started happening.
Normally about a third of the homes that get listed take a price cut. Sometimes that's intentional. Sometimes it's accidental. Sometimes it's a crazy seller that wants to waste your time as a listing agent, but whatever the reason about a third normally take a price cut.
When the market is hot, fewer homes take a cut. You know, "I overpriced my home and I get my offers so I don't have to take a price cut." And we're shifting from this ultra ultra fast market where nobody had to do a price cut. Now, if you're overpriced, you're going to sit and you're going to cut your price. In 2020, we rolled into the pandemic and we started buying everything in sight. And so no price reductions had to happen. Then last year, the market accelerated into that frenzy. We had fewer price reductions all the way into May. And then you have your normal seasons started to kick in, as the price reductions were climbing last July, we were, if you remember these webinars, we were talking about how it feels like we're getting closer to normal. Like things are starting to normalize a little bit. And they did, but by the end of last year, they kind of accelerated again.
Then we started this year in this real steep frenzy. So what we can see now is that we're going to get over 30% probably in July, and then maybe 35% would get up in this range. And I'll show you in a minute, some of the local markets where we're talking about price reductions. We can see the ones that are needing to reduce more quickly.
In 2018 mortgage rates were rising. And by the late summer of 2018, if you listed your home in August or September, you might have been surprised at how slow it felt. It started to slow way down from a much faster market earlier in the year. And it was still kind of in the normal range.
That's what sellers are going to feel this fall. They're going to feel like, wow it slowed way down. Even though we're back into normal range, that's still going to feel really slow.
If we watch price reductions climb, in say September, over 37% up to closer to 40%, that's going to be a real bearish signal for home prices. Transactions that happen in 2023, my guess is that it's going to climb up to one of the highest levels. And then we'll get our seasonal curve. It'll come back down and we'll start to have a normal seasonal curve.
We'll get back into the normal level of price reductions. I think we're going to go above these though, and it's going to feel really slow. So sellers right now, you want to price a home properly right now. Because you want it to move as quick as you can now, so that it doesn't linger around into August or September when it's going to feel even worse. That's what the data is showing us in price reductions.
On the demand side, we've been tracking the immediate sales and the immediate sales have really been the defining characteristic of the pandemic boom of the last two years. These are homes that get listed and they take offers and go into contract within hours, or just a couple of days.
We still have immediate sales happening. Across the country, we still have buyers doing it. We have my brother who got outbid on with multiple offers on a place in Pennsylvania, just Sunday.
We had 86,000 or 87,000 that were newly listed that stayed on the market, that didn't go in immediately. And that is the highest level we've seen since last year. We can see the supply coming to market. Some of them are still going very quickly and that's going to shrink.
But in fact, the immediate sales have held up better than I expected them to. I expected that to slow much more quickly. I think this is evidence of a lot of pent up demand. Buyers who've been needing to buy for the last couple years and have been maybe getting bought out. And now they finally get their opportunities to get their homes.
We have currently 23% of the new listings going into contract immediately. Earlier in the year it's like 33%. And that's been falling very steadily very each week since April. Even we have more homes for sale. And so fewer of them are selling quickly. So we're going to see this drop as a percentage, and I don't know how low it goes. There's always some immediate sales in the market. Usually it's probably five to 10% and we're going to see where that goes before it starts to turn around again for the fall and summer.
Right now, like I said, it's falling, it's notably falling less each week. Fewer homes are going into contract immediately, fewer bidding wars. And so your sellers should know that, your buyers actually should know that too.
One of the things that's happened during the last two year boom, inventory fell so far, that we actually have more homes in contract than those that are active on the market. Right now. Active inventory is climbing faster than the pendings. And so a normal market would have more on the market than in pending contract. So we're going to watch this difference shrink over time.
So if we're in an inflationary environment, there's some fears of recession coming, what happens is that forces people to sell their homes; if they lose their jobs, or if they have renters who can no longer afford to pay rent. And if that happens, we will start seeing the rent numbers decrease. And it's at its peak. It's at its peak nationally. They've been climbing very dramatically, 10%, 12% from last year. You can see that increase from 1900 to 2250. And so we will start to see that adjust if there are people who start losing their jobs. Right now, employment is very strong. Unemployment is very low and therefore rents are still increasing and therefore investors who own homes with their cheap rates that are locked in, have good revenue.
So one of the reasons to be sort of bullish for housing in the next year is that rents are good. Costs are low and fixed. So that means that investors don't have a real incentive to unload their properties, unless we see for example, rents tank and that'll be a signal for more investment properties coming to market, adding to our available supply.
Let's look at price increases. These are the homes on the market that we've seen earlier on the market recently at a lower price. Typically these are investor activities. These are flips. there may be some marketing things where we take it off the market and put it at a higher price point. But in general, what this shows us is when we're in a bullish market. You see the price increases peak. We have these two big peaks in the last two years, as investors came into the pandemic and they were able to do flips it turned very abruptly in the first quarter of this year. We now have 3.1% of the homes on the market with price increases. that's the fewest since the early pandemic.
Normally we'd have 2% to 4% of the market. We can see, we're going to get back into that space. And the question is, does it fall below 2%? And that would be a bearish signal. If we can see that investors and flippers can't put it back on at a higher price that's going to be a bear signal for future transactions.
So this is where we can see we were going 90 miles an hour, and we took our foot off the gas. This is one of the places we can see it, very clearly: price increases.
Here's another signal to watch as a leading indicator for the future. This is the percent of homes that are re-listed. So they were on the market. They were pulled, maybe they went into contract. The contract fell through, and now they're getting re-listed.
What happens is stuff gets pulled over the holidays and re-listed in January. So you see an annual spike each January. This year there wasn't a big January spike because things just went really quickly. Normally we're in this one to one and a half percent range. And right now we're kind of easing above one and a half percent, one and a half percent of the homes that are getting re-listed. My expectation is that as buyer demand weakens, as credit availability, or ability to actually close that loan at a price you can afford, as that weakens you'll have homes that go into contract that come back out and we're going to see re lists climbing. That's also a bearish signal for future transaction prices.
That means I tried to buy this house. I no longer can afford it with my mortgage payment. I have to back out: the house gets re-listed. The house is going to have to come back down at a lower price, because the people who are trying to buy it can't afford it. So that's something that we're going to watch very closely. It's starting to ease up above this 1.5% range, currently 1.6%. And we're going to watch that climb, I think, this year.
How high does that get? That could be a bearish indicator for future. June is peak market time in terms of speed, time on market. We're still at our peak market time, just 21 days median across the country. Right now we can see where it's starting to change though.
Time on Market
The second half of the summer time on market starts to climb and then resets for January with the fresh new inventory. People feel that, you can see things are moving quickly on the whole. And there are just some properties, some price points that are starting to take a little bit longer. And so we'll take a look at that, in each of the Altos reports, and we're going to switch over to the reports in just a minute.
We break down every zip code in the country, every county and city down into four price range segments. The high end of the market may be behaving very differently from the low end of the market. And this is nationally. The high end of the market is about 1,000,000 and the low end is under 200,000. Last month we had the middle-top, was still 14 days. And the high end and the low end starting to take slower.
But the place where people are buying right at around 500,000, that was still the fastest. So that one has notched slower now this week. And it's going to, probably next week, we'll see we're at probably, you know, closer to 28 days.
So we can also do things like, "what are you getting for your money in this price range? What does it mean?" You know, I use the quartiles of the four price range segments for answering the question, like, "do I have a lot of competition in my price range? And how many are there? What kind of properties are they?" You can see in this case, the low end, the under $200,000 ones. These are 66 year old homes. The high end ones are, are generally newer. You can see they're slightly bigger. They're bigger lots. That's across the whole country. And every local market has a market segment view that, especially now, when you need to set those listing price expectations, this is where we want to show your price range, this is what we can see happening too.
For example, days on market, this is where we see we have the most competition in the market. So use your reports that way. By the way, if you don't already have the Altos ebook, _How to Use Market Data to Build your Real Estate Business_, it's free. You can go click through to the Alto site. This is where you get scripts, how to talk about the data, how to talk about days on market, this is how you use, for example the market segment. So I'm talking about them in this video, but you can also use the ebook to get those scripts and understand how to communicate best to your clients.
Let's do one more set of stats. And then we're going to switch over to local data.
Market Action Index
The market action index is Altos proprietary tool to answer at a glance: "How's the market?" It's supply versus demand. And it works like a speedometer. When that thing is higher, that means supply is tighter and demand is high as supply increases, or as demand starts to back off, that speedometer starts to cool down. And what we can see here, the little gray line here last month was a little bit higher. We're starting to tick down every month as inventory climbs. As we see price reductions or re-lists happening.
When you're working with a client, for example in the listing presentation, you take the Altos report and you can say, "Are you a big geek or a little geek? Cause if you're a big geek, there's a lot of data here. But if you're just a little geek, I'm going to put this report in your inbox every Monday. And I want you to look at one number. We have your house listed, we're going to list your house now. And this market is changing. Everybody knows this market is changing. We're going to price it correctly so that we can get ahead of the changing market. But while we have your house listed, I want you to look at this number, this market action index, every Monday, if this has fallen, while we have your house listed, that's the market giving us a signal that your demand is backing off. And that's the market telling us that we may need to adjust the price of the home to make sure it moves before the market changes too drastically."
And so this gives your sellers the power to know what the market is telling us before the seller calls you and goes, "Hey, Mike, I've been watching this market action index. Maybe we should do a price reduction to make sure we sell this house before the summer gets too late."
And so you want to have this in their inbox every Monday. You want to have it. You want to set those expectations in the listing presentation, and you can say, "I want you to look at one number."
Here's what the market action index looks like over time. Each week is dropping very rapidly from this ultra high levels record high levels. Now getting back to normal, over 30 in this is still sellers marketing conditions. That means we have sufficiently tight inventory. We have sufficiently strong demand: homes are selling. Prices are holding up. All of those things are happening. And so we're in sellers market territory.
We're moving from crazy sellers market territory to more normal. We actually haven't really been in buyer's territory for a long time. At the beginning of the pandemic in March 2020, there was a little downtick when normally things are climbing, there were about four weeks of downtick when things were normally climbing. And then promptly, we started watching that market action index climb. And that's when we knew. It's, you know, mid April, and we said, "people are buying homes everywhere," and we could see it in the market action index.
You could see it very quickly. As this gets closer to 30, that's the signal for your sellers. And especially if you have sellers now who are still trying to get a high price, they're trying to, for example, test the market and they don't care about how long it's going to take you to sell. Then this is how you use the market action index to communicate to sellers about how to act right now. Like, "I want you to look at one number."
All right, let's switch back to local data.
So I've been talking about price reductions. The changes each week in price reductions have been really fascinating to watch. I have ranked the 50 top markets with price reductions. These are all markets with at least 750 homes for sale.
Right at the top of that list is Boise. Boise had a ton of inbound migration, especially from California, over the last two years. And you can see where normally price reductions might be 30, 35, 40% in Boise, all of a sudden during the pandemic 8%. So people are buying everything in sight. People are coming in from LA. Last summer, it cooled off. And what we're seeing right now is steep increase in price reductions. 40% of the homes on the market in the Boise region right now have had price reductions. That's up from 10, 12, 13% earlier this year. So that steep curve is what people feel right now. Listing agents, this is your opportunity to communicate with sellers, how to do it right, how to price right, to make sure it moves.
What a surprise Phoenix in general has higher price reduction. So 40% might be normal for Phoenix. What we can see is Phoenix was super, super fast. 40% is normal with price reductions, but only 15% needed to take a price cut this spring. It was under 20, and now it's up to 40. And if you're selling in Phoenix, you'll know it. If you're not priced right, you'll know that.
New Orleans is higher on this list, but new Orleans was never as low, only 25%, 26%. So even as New Orleans slows, New Orleans is a slower market in general than say Boise or Phoenix.
In California, Sacramento, the central valley, which is also kind of acts like Boise it's people move out of LA or San Francisco to the central valley. And so, you know, we had 15% and now up to 33% in central valley.
Salt Lake City is one of the big movers of the last couple years, only 8% price reductions in Salt Lake City in February when normally might be 35% or 40%. And we're in up to 32% now.
The biggest markets have had the biggest influx with the highest demand. Those are the ones that are adjusting most quickly. There are places in like the Northeast that are adjusting or the east where they're less boomy markets.
Baltimore has 28% price productions. Climbing, but, you know, still lower than normal. And so in general, you can imagine that the cities that have had the greatest inbound migration and appreciation, you can really see what that those are the ones that are experiencing the slowest.
Boise Real Estate Data
Quickly let's look at Boise at the local level. This is for the Boise Metro market. Here's the market action index. Last month it was in the sixties. Now Boise is down into the fifties. That's we can see that it is very clearly slowing down here. We can see that in price reductions.
Boise is one of the very few markets that now has more inventory than it did at the start of the pandemic. That's the first start of the pandemic. So inventory is higher than two years ago. Definitely higher than last year. Not quite to normal, but getting close to normal. In Boise, anything under $600,000 are the ones that are going the fastest. $700,000 and up, it starts to slow down. You can see exactly what's happening when you need to communicate in those price ranges to your buyers and sellers.
Washington DC Real Estate Data
The Washington market area has been a strong migration story over the last few years. And while inventory is climbing, inventory is just barely higher than it was last year at this time and still lower than two years ago and way lower than three years ago. Washington has had a longer term boom, rather than the real strong last couple of years of say Boise. So that's an interesting view. Places like Washington, DC anything under a million bucks in DC is still going in a couple of weeks, slowing down slightly at a million and a half. So that's the whole DC Metro region.
Cape Coral, Florida Real Estate Data
I pulled up because this is one where the price decreases are starting to make the most dramatic change. We had 16% with price reductions early in the year and now we're at 34%.
A lot of the Florida markets are, you know, feeling this, there's inbound migration, a lot of investor activity. That kind of thing is what we can see happening in Florida.
Phoenix Real Estate Data
So Phoenix is one that is, you can see going from super, super fast on the market action index, slowing down very dramatically, still very fast, but slowing down like a big move month over month in the market action index and sellers need to know this, right?
And this is how you can show if a seller thinks it's still here and they want to overprice. We need to show them that this is happening and they should keep watching this every Monday.
Phoenix is up year over year in inventory, not quite where we were two years ago and way below the long term. So my expectation here is Phoenix gets up here much closer to where it was in its normal state. And then the question is, how far does it go beyond that? You're like, are there recession pressures or other kinds of things that cause investors to unload properties?
You know, there aren't really things like what led to the bubble burst. No consumers have a bad mortgage. Everybody has a ton of equity. Everybody has really low rates, so that boom, where people were forced to sell because they had this lousy mortgage that doesn't exist anymore. And so that's why it's really hard to see, you know, do we get to September, we keep climbing, we have a nice normal arc of inventory curve, you know, seasonal curve. And then we settle in normal. L
That is really the question, or do we blow through that because buyers now, with high rates, can't afford anything. That stuff isn't in the data yet, but it's certainly stuff to watch and you can watch it in your Altos report every week.
Texas Real Estate Data
I'm going to do real quick with Texas because Texas is actually slowing less aggressively than for example, Arizona.
Texas has year over year inventory gains. What's interesting though, is Austin is the biggest boom market of Texas with the biggest inbound migration. Inventory in Austin is adjusting very rapidly, has lots more than last year at this time, and is getting very close to the two years ago. Austin is behaving closer to Boise than it is to the rest of Texas.
That's all the time we have to share the data today. If you have buyers and sellers right now, who need to understand what's going on, go to Altos research, click the "get started" button, get the data today, and you can get it in the inbox for your customers right now. We can get it to them today.
Your buyers and sellers need to understand this market is changing so fast and it's changing all over the country, but at different rates. For your local markets, you need to be able to communicate that for them. So go to altosresearch.com, click "get started."
You'll be able to look at your local markets. You'll be able to get the ebook, all of the good things.
As always, thanks for joining us. I really appreciate the attention. I love that we have so many people interested and joining these webinars each month, stay tuned to the Altos YouTube channel, and we're going to stick around in the chat box for just a few minutes and see if there's any other questions that we can answer. All right, everybody. Thanks so much.