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.
Mortgage rates are way up. Inflation is super high, stock in crypto markets are way down, is it possible that real estate escapes all the economic carnage? The fact is available inventory of homes for sale is rising rapidly. Yet home prices are still hitting new records each week.
So what does it all mean? Is it a sign that the market's turning? Should we be worried? These are real signals and legitimate questions to ask.
We have 1500 people registered for this webinar today. Realtors, brokers, lenders, investors, traders. I'm sure we have a few individuals, consumers non-real estate professionals who are just trying to understand what's happening to their own property, values, their own buying and selling opportunities, but apparently people care. So we're going to take some time today and explain all the data in the best detail we can for you.
We have some new folks on the call today, so I will share a little bit about Altos and what the data is. We are looking at what we can see and what we can't. And along the way we're going to see if we can make some conclusions about the future.
Every week, Altos research tracks every home for sale in the country. We analyze all the pricing and the 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.
I'm Mike Simonson, I'm the CEO of Altos. Before we dive into the data today we have, especially if you're new to these webinars you'll notice in the chat. We have a couple people from the Altos team. We have Leyl and Jeff from the Altos team.
If you have questions along the way, drop them into the chat, we try to answer those as we're going. We'll also post links. In a couple of points during the call today, I will reference some opportunities for other resources or connecting with our team. So they'll post links in the chat and you can click on those to connect with us and dive into local data, et cetera. So you can use your chat window for that. If you are a real estate professional and you're not yet using Altos reports in your business, you should definitely join us. There are 1500 people on this call because everybody in the country needs to know what's going on with real estate right now. And that's what we do is we help you communicate that to your clients every day.
Okay. So we get about 45, 50 minutes today: let's dive in and start looking.
We're going to start with talking about rising rates. That's the big thing on everybody's mind. The shift is really happening. It's notably happening in inventory. And so we'll start with inventory. We'll look at the available inventory, the changes in the inventory and what we're going to keep our eyes on over the next few months to see how big the shift is, how deep does it go? How quickly do things change or do they not? Prices are setting new records weekly still. That's not actually uncommon. It's okay for inventory and prices to rise at the same time, especially in May.
We'll take a look at pricing and then, through the data, helping clients through their fears right now: Am I about to buy at the peak? Are things going to tank? There's a lot of those questions that having the data helps your clients understand and answer the questions for themselves.
People are afraid. That's why we have 1500 people for this call today.
Okay, let's dive into the data. So we're starting with interest rates today. Mortgage rates are five and a half percent. The highest point in a decade. They're far above the long term, average of 4%, which is where we've been for the last decade. And frankly rates jumped higher, faster than I expected. And we have yet to see the full impact of that. I often say that while we track the housing market in real time, we measure really fast.
I don't have any ability to predict where mortgage rates are going to go. Do they go higher from here? Do they go lower? Do they stay flat? I don't have any ability to predict that. When I bought my first house 25 years ago I had an 8% mortgage and I locked it in for 30 years. Cause I thought rates were going to go up. And then I bought the second house at 6% and I locked it in for 30 years cuz I thought rates were going to up and I bought my third house. I'd locked it in at 4% because I thought rates were going to go up. And so I have no idea where rates are going. What I do know is that as mortgage rates have risen, the payments on homes have been really affordable for owner occupants, but also really affordable for investors.
That dynamic is changing. That's one of the reasons that leads to higher inventory. We'll dive into inventory in a second and we'll show where we are and where we have to get to. So we'll see the impact of that.
But the last time that rates rose was in 2018, towards the end of 2018, it hit about 4.9%. And the market notably slowed at that time. If you were selling your house in August or September of 2018, you could feel it. You could feel a market that had gone from super fast in the spring to slow. And so sellers at that time got worried. They got worried very quickly. We could see price reductions increase.
We could see inventory, we could see time on market increase all at that time. So we have that going again for this year, we know that's rising and we can show you where those are. Those are rising already. What we don't know is: are we at the peak? Will things start backing down? Or if inflation keeps going do mortgage rates continue to rise from here? And what impact does that have? Interestingly, with inflation at 8% and a mortgage is at five and a half, a 30 year fixed mortgage is actually still a really good deal at 5.5%. So it could be that we have all these scary factors in the economy and the markets, and it's still a really good time to own.
That could be a factor that we see, or it could be that rates continue to climb, continues to cool demand.And we have a dramatic, slow down. Some of those, we can only see the beginning of that right now. And like I said, I don't have an ability to predict mortgage rates. If I did, I'd be in the mortgage rate business, not in the real estate data business, but let's look at at inventory.
So this week 305,000 single family homes active unsold on the market. That's rising rapidly each week, four and a half percent this week, 6% the week before. We peak in June, July, August, and then inventory decreases for the second half of the year, resets January, February, and starts again. Last year, we were just at the bottom of the market. And so I think by next week we will have year over year inventory gains for the first time, since back in 2019.
Each year we have fewer and fewer homes for sale. And that is generally because Americans have turned their homes into investment properties. And as rates have been 4% or 3% it's been really a good time. You buy your next house, you keep your first house as an investment property and you don't sell it.
So the resale market has shrunk over the last decade year over year. The only time, the only year, it didn't shrink was that 2018, 2019 time when rates rose. So this year we're going to have year over year increases and it'll be starting next week for the first time. We are so vastly lower than normal. We're have so many fewer homes on the market than normal that we have a long way to go to get to anywhere scary crisis of too many homes.
But it's going to rise quickly. And we'll have year over year gains. You can see that even just a few years ago, like at the beginning of the summer in 2015, we had 1.2 million single family homes active on the market and we're at 300,000. We're a long way from that. But it's rising quickly.
It's changing quickly. And so for sellers or buyers we have that message where I'm worried if I sell now, did I miss my opportunity to sell? We know that inventory is still super low. We know that time on market's still super fast and we can show a few of the other factors to show that if you price right, it's a great time to sell.
Buyers are worried that maybe I'm buying right at the peak. We have some opportunity to help frame that discussion for them. If you can afford the house at the new rate and you like the house, then it's a pretty good time to buy the house. We don't know, for example, does rising inventory make it feel a little slower, but still ultimately really fast?
The last six cycles of rising mortgage rates, actually in none of those times, did we have falling home prices? Home prices continue to rise even as rates are rising steeper, it's a big change. So this is new territory this year, and we're going to see exactly what happens, but many of the signs are optimistic.
We have a projection of inventory. As rates rise, we'll start having year over year inventory gains next week in May. And we can see how we will end the year. Well, the peak of the year will be about 500,000 homes, end the year: about 400,000 homes. This is active single family on the market. That'll be like a 30% year over year gain from the ultra low where we were this year.
The important thing to know here is that as rates rise and it's more expensive to own a second property own an investment property more of those get on the market. Some people are worried for example, that we're at a top of the market and they want to list and capitalize on that. So more of those homes get listed for sale. And we get more inventory. There's very little sign anywhere in the market of a flood of inventory. So a flood of inventory might come traditionally from homeowners who are out of work. They can't make their mortgage payment, they need to sell, or they go into foreclosure. And all of those signs, the unemployment is ultra low. We know that every American has record levels of equity in their homes. We know that every American has their mortgage locked in for 30 years at ultra low rates.
The cost of owning of the homes that you already own is not rising. So no matter what happens to rates, there's no trigger for a big flood of Americans to sell their homes. We know that the number of properties and the percentage of homes that are anywhere in the mortgage delinquency state are at record lows. So that means if there were, for example, job loss and then people couldn't pay their mortgage, then go delinquent and they go 90 days delinquent, and then they go into foreclosure. And now it's six months delinquent.
If we have some job loss, maybe in 2023, then it's a 6, 9, 12 months before we'd have any amount of that kind of distressed inventory available to come to the market. And frankly, because everybody's got such a good deal on their existing mortgage, that seems still unlikely for several years.
As we look at the forecast for where inventory comes, even as rates rise, even with all the craziness in the economy, there's very little signal that we can go back to anywhere normal in the curve of million 800,000 or 900,000 or a million homes on the market. In 2018 rates were rising. 2018 started the year at the sort of low end and then finishes the year in higher than several others. Inventory climbed during the year as rates rose. And that's what we're looking at for 2022.
Let's look really quickly at the state level. This is the Altos research advanced analytics platform. It's in beta testing right now. It allows our customers to dive into any of their markets. They follow and do ranking and comparison and visualizations. If you're interested in getting access to the beta of the advanced analytics platform, just drop us a note. And we will add you to the waiting list for the advanced analytics platform. But what I've got up here is an inventory chart ranked for all 50 states. You can see Texas and California have the most. It's always fascinating to me that Texas is half as big as California in terms of population, but has 25% more homes for sale right now, and always has more homes for sale.
And that's a function of Texas's property taxes, which are significantly higher than what you pay in California. And so holding costs for property in Texas is significantly higher. And in California, it's artificially low and therefore homeowners in California have like a rent control with their property.
Texas is just starting to turn up now, lot of inbound migration, lot of demand building that up. We've had outbound migration of California. But you can see that, for example, Florida is starting to turn up pretty quickly down here.
We were looking at Arizona is starting to build inventory very quickly. Arizona usually has way, way more homes for sale than this. And we'll dive into some of that local data at the end of the conversation today. But you can see really quickly, Arizona is starting to pick up.
Colorado is starting to pick up pretty significantly in inventory. And so these are the markets that have been very hot with a lot of inbound migration, and they can cool very quickly. It's like a stock in a stock market. They call it high beta. The beta is how volatile the stock is compared to the market as a whole. So these high beta real estate markets are also the ones who are most sensitive to, as inventory rises, to price changes, et cetera.
And so we'll dive into that as we go along and I've just been watching these states every week so that we know, like we can see which ones are starting to tick up.
Immediate Sales Tracker
Okay, let's go back to our demand side really quick. We have the immediate sales tracker, the phenomenon over the last few years is that homes are getting listed for sale. They're taking offers essentially immediately, maybe within hours or a couple of days. And they're going into contract. They're essentially bypassing the traditional active market altogether. They're ready to be sold as soon as they get listed and we can track them.
Right now we have about 27% of all the new listings that hit the market last week went into contract essentially immediately. So these are single family homes. Now as the market cools, we should see that portion shrink. And it shrunk a little bit in the last six weeks or so. We went from about 33% of the market of the new listings.
A third of them get going into contract immediately. Now we're at about 27%. So starting to shrink a little bit, you can see this pattern over the last year. You can see the January reset is when we have few listings. In the middle of the summer, that's the 4th of July week where you have fewer listings. And so we have a good pace. We have real demand. These are buyers who've been shopping for a long time.
This is why sellers right now, even though we have turmoil in the markets, and we have these early signals of the market changing, we still have bidding wars. We still have multiple offers. We still have lots of those conditions happening. So these are likely to cool, but because we're coming off such a strong base, it seems unlikely.
This year it’s unlikely that we're going to have any you know, significant like price correction. It's way, way further out in the future where maybe things are softer, especially if there's some kind of recession. That's further out, 18 months from now or something like that. Those things like recessions are not visible in the active data right now.
We can see what's on the market. Now homes are on the market. Now they get listed today. They take offers in June, they close in July and you start to see the sales prices in August and September and October. What we're tracking is right now. That's why we're watching the active market here. And what we can see right now is that the headlines for home prices are going to be hitting record highs all the way into the late third quarter, even though we can already see the early signals of the market turning.
So it'll be tricky. Your clients, buyers and sellers, are going to have mixed messages all the way through the year. They're going to be like, how can home prices still be hitting these record highs? And it's because the traditional real estate data is really old by the time it gets to you. And that's why you really want to have your Altos data in their hands every week while they have their house listed for sale. You can say: "I want you to keep your eye on this report."
Pending Homes for Sale
Let's look at pendings really quick. One of the phenomenon of the last couple of years is that we've had more homes in contract than are on the active market: people have been buying everything in sight. And you can see it starting to grow each week now. It'll be interesting to watch this chart over the next few months, does this start to shrink? So that more homes are on the market.
We process through the ones that are in contract, and we flip that back around traditionally, you might have three or four times as many on the market that are in contract. So we are starting to close that gap a little bit, but it's a long way from anything slow. Okay. So we've talked about supply, we've talked about demand.
Here's how it translates into prices. The median price of a single family home in the US right now is $432,000. That's a record high this week.
As I mentioned, it's not uncommon for the Spring and especially May, to have rising home prices and rising inventory at the same time. This is the peak buying and selling season. People are getting ready to move in the summer. They want to get the transaction done now, like this is where all of the good stuff happens. So it's not at all surprising that home prices hit a record high this week, even though mortgage rates have been spiking all year.
Each of the last seven years of price curves, we climb through the second quarter. There's a little plateau in the summer, and then prices back off in the fall a little bit. In 2020, we had a tiny little dip, three weeks of buying opportunity. And then people started jumping back in. You can see in that 2020 time period, that pandemic time period, prices did not back off in November and December, right until the holidays. So they stayed elevated all year. Last year, 2021 started with extreme demand and prices took off immediately very quickly.
We're still seeing the traditional headlines talk about 20% home price gains. You could see it all last spring. That's where those games were happening and why we were looking in the data there. And it's why you can see we're going to get those headlines for another six months, because you can already see it in the active market.
We'll be about 10% home price gains year over year this year. And it looks like we'll likely hold that level. The little plateau in 2021 is about 400,000. We'll be about 440K in the next few weeks. And so we'll plateau there. Before the fall, we start to ease back.
Newly Listed Cohort
Newly listed cohort are the properties that get listed each week. And when you go to list your house, the sellers and the listing agents, they are using all the signals around them. The economists call this a wisdom of the crowds and the crowds in this case are the sellers. And they know for example, that there was a lot of demand recently. They know that there were multiple offers at the last one. They know that the open house is full and they have all of these signals.
And so they are pricing accordingly. They're like, “well, we're going to go capture some of that demand.” When they say, “wow, that house down the street thought it was going to get multiple offers and didn't, and now it's three weeks later and it's still on the market.” Then the new listings price a little bit lower.
We are at a record high with the price of the new listings. We know that there's multiple offers and all of those actions are still happening in the market. Very strong buyer demand. These are buyers who've been looking, maybe some of them for as many as 18 months and getting outbid. And they're still interested in buying. These are buyers who got married and they're having a child and now it's time to buy. Those life events haven't changed. And so what we can see there is if you are in that phase where you're working with clients who are afraid, for example, that maybe they’re going to buy at the peak, we can show the leading indicators in the pricing.
You can do this at the local level too. Most years the more expensive stuff stays on the market. And the cheaper stuff moves really quickly. What that's been showing us is just ultra ultra strong buyer demand, strong pricing. Overbidding, it's all of those signals in there. And so we're going to be watching for this one when it starts to separate, like it does in normal years, and it hasn't yet.
So this is actually a bullish signal for pricing, at least for the next handful of months. These are houses that get listed today, then they're on the market, hopefully for more than a week, and then they get offers and they close.
So we have that leading indicator, especially of the traditional transaction data that is backward looking right now. You have March in April and some February data that's just getting released right now.
You might be aware that rents are also increasing. Rents are up 15% year over year. So what we have is a phenomenon: rents and home prices move in tandem. They don't move opposite. It's not a choice of either rental or a house. It's time to move out. It's time to find a place to live. And so rents and home prices rise in tandem. And as rents rise, it also makes it more affordable to buy.
The rents have not turned down either. We track rents at the local level in your local Altos reports too. Sometimes it can be really useful for a quick handy reference with buyers to know what's a rental home going to cost in this market. And we do that in every zip code in the country too. So you can reference that in your Altos reports. On the demand side, one of the leading indicators that I try to keep us all aware of is the percentage of homes on the market with price reductions.
Normally about a third of the market takes a cut before they sell, 30% or so. Sometimes that's strategic: it's intentionally overpriced and then they want to take a price cut. Sometimes it's accidental or it's a seller who is crazy and they want too much. This year, we're deviating from last year. We had record few reductions right up through March of this year, and then starting as those rates started to rise, a few of those sellers aren't getting the prices. They're asking too high. They're sitting on the market when everybody else is moving and they've got to do a price cut.
19.8% of the market has had a price cut. Normally that's 30%. Fewer people need price cuts, so we’re still getting multiple offers and we’re getting bidding wars. Sometimes people are getting those offers that they are trying for, but each week it's slowing down. And so for your sellers, the message here is the homes that are priced right, are moving quickly. If you're not pricing right, our opportunity to really roll the dice is probably behind us now. Maybe you can roll the dice and still get it, but it's adjusting quickly.
2018 started under 30%, like 27% with price reductions. But then as the year went on, it goes up in more and more price reductions. And so the peak of 2018 had 37% price reductions. So 37% of the homes on the market took take price cuts. When the bubble burst, it was like 48%, 50% in 2000, like that was 2008-2009 period when people were really shocked. And you could really feel like half of the stock had had a price reduction.
In 2018, it was up to 37% and sellers at that time could feel it. And so that's what you will want to be preparing your sellers for this fall as price reductions start to climb, preparing them to price right. But also what that means for market time and for competition. That's how we can see the market shifting. If price reductions start to get 40% nationally or higher, that's going to be a really bearish signal for pricing in the future for transaction prices in the future.
So the home is on the market now, and it doesn't get an offer. So it does a price reduction in June, and then it gets its offer in July, and then it closes in August. And then the transaction prices get reported in September and October. So you can see it in the data right now, the price productions data right now.
We're shifting out of a crazy, crazy hot market. And maybe just back to normal times, but normal times are going to feel slow. Local markets have their own price reduction ranges. For example, Arizona, the Phoenix area tends to be much more commonly at 40 to 50% with price reductions, it is a much more investor heavy market. This tends to be significantly more inventory per capita than for example, California.
The California markets have fewer price reductions, because the inventory is always so chronically restricted. And so many of the hot markets like Boise will also go from these low 20% to all of a sudden in the fall, maybe 40% with price reductions and your clients, your sellers should know to expect that.
And we'll show you some of that in the local data in a few minutes.
So market time is still ultra fast. We are almost at when the normally fastest time would be: June or sometime in the next few weeks. We had this little oscillation between 25 and 28 days median on the market. This is nationally single family homes, three weeks on the market a couple weeks ago. It rose up a little bit.
Time on market at the high end of the market is starting to slow a little bit, which normally is slow in the last few years. The boom has been across all price points and across all geographies. But as it slows, we should be able to see it at the high end, probably first.
The peak is right at the holidays and then declines right through the end of June and then starts to go if you haven't sold your house in June, and now it sits on the market. Now it starts to get a little bit longer in the second half of the year. Which is also why you start doing price reductions and why price reductions rise in the second half of the year.
There's this little spike in 2020, that was the pandemic few weeks. And then it dropped last year. We dropped way ultra low, we still had more to accelerate. We were not done yet. But this year we're, we're just bouncing around and we're likely to start moving up. It's still ultra fast, like to get it back to 40 days or 50 days to be a much more healthy market for buyers and sellers.
But that's the market time we're looking at. Then a couple weeks ago we saw it jump. We were interested to see if it's going to slow, but it's still moving super fast, three weeks, 25 days on market for the US.
In all our Altos data, we look at all of the markets in four price range segments, because the high end of the market may be behaving differently from the low end. And what's interesting, if you've been watching these webinars the last few months, the demand in the US has been across all the price points, but we could see the highest price segments took a little bit longer to sell.
It's interesting now that right now the fastest is still in that $550k zone. Interestingly if you're getting a jumbo mortgage right now, the jumbo mortgages have significantly cheaper interest rates because of the way the private market works versus the government backed market on the jumbos. And so it could be that what we're seeing right here is that people who are buying in that 600 to a million range using a jumbo mortgage are actually still feeling really cheap mortgages where the lower end is a little bit more expensive on a payments basis. And so time is starting to tick up for the homes in the 350K range with a conventionally backed mortgage.
I will show you these in the local markets too, by the way. If you're on this call and you are new to Altos research, what we do is we talk about all this data. If you need to learn how to use the market data, to communicate to your clients, we have a free ebook that you can go to. It's how to talk to clients on the data. It's like, how do we use these market segments? What do we tell someone when they're listing their home? How do we answer these tough questions, these fears that everybody has right now? So it's got scripts, it's got ideas, it's got strategies. It's got answers to “what does this data point mean?” When you're an Alto's client, you have your reports in your inbox. You'll see how all of these work when you're working with the data with your clients every week. And so that ebook is really awesome.
Last section is on market demand. And then we'll shift over to the local data. And then we'll wrap up the conversation for today.
Real Estate Market Action Index
This is the Altos research market action index: What we do is it's an at a glance number for any zip code in the country to answer the question: “How's the market?” Is it slowing? is it still hot? It works like a speedometer. The higher it goes the tighter the inventory is relative to supply. If supply starts building that market action index will start ticking down. If demand is weakening, then that market action index will start ticking down. 30 on this scale is a balanced market below that are there's enough inventory. Above that, it means that it's been strong sellers conditions.
It's been a sellers market for years because inventory's been tight and shrinking every year for years. You can grab this on any Altos market report. When you have sellers listing their house—and especially if they're worried that they've missed the timing on the market—the technique is this: take your Altos market report, put it on the top of the stack when you do your listing presentation. And you say, “Are you a big geek or a little geek? If you're a big geek you, you got lots of data here. You're going to dive in. It's going to be great. But even 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. I want you to look at this speedometer every Monday, while we have your house listed. If that number is ticking down, that's the market telling us that all these dynamics are happening.”
And that gives your client the opportunity to call you and say, “I’ve been watching this every week. Maybe we should do a price production to get out ahead of this.” If my house has been sitting on the market more likely though, they're going to look at it and they're going to say: “Thank you. I'm going to be confident. We know it's a strong sellers market. Yes. It's maybe cooling a little bit. Yes, we might feel it in market time, but we can know that we're still in good sellers opportunity. And if we price this home appropriately, it'll sell and we'll be in just find shape.” So I want you to look at one number.
So Market Action Index nationally is at strong sellers at 68 on that a hundred point scale. Normally it peaks in May and then starts starts to cool down in the second half of the year. It skyrocketed in the second half of 2020, the first year of the pandemic. And then last year, super high and cooled off a little bit in the second half of the year, but not really that much.
What we can see right now is that demand is turning. It turned down earlier than it did last year. This is a cooling sign and we can see it. We can see relative levels of supply and demand. We know that that it's still record high because supply is still record low, but what we can watch is how far does that come down? And how quickly does that come down in the second half of the year? Does that get us to all of a sudden buyer's opportunity or not even buyer's opportunity, but less competition, fewer bidding, less insanity. Do we get to that?
2018 started strong and cooled all the way during the year as rates rose. And that's the impact that we're looking for. Like, it's going to cool all the way through the year.
All right. We're switching back to some local reports and let me take a look. So I am interested in some of the markets that have been the most hot.
Denver Real Estate Data
This is Denver, the Denver Metro area in the market action index. It's still floored, right? It's still as hot as it's been: inbound migration. We know seven days on the market, but let's look at the inventory trend. Denver finally had increasing inventory last year. It was barely inching up.
Normally this time of year, Denver has increasing inventory, like a lot of coming on to peak in the late summer in Denver. In the price range segments in Denver everything is still nuts. 14 days for million dollar properties. Anything under a million days on market is still seven days or zero. These are all immediate sales. They are going essentially immediately into contract. And so this is just the early signs of inventory starting to normalize a little bit in Denver.
It's still so floored, because the inventory is so tight: a lot less than a third of where it normally would be. And demand’s still super fast. So we have a long way to go to get to anything normal. But you might hear about rising inventory in Denver and that's exactly what's happening. So for buyers, it's slightly more opportunity.
Arizona Real Estate Data
We can look at Arizona. So Arizona is always has a bigger investor activity market. And so there's a lot more volatility. And it typically has a significantly more inventory.
In Arizona inventory is starting to rise and likely going to get back up to 15,000 homes across Arizona by the end of the year. Arizona's dominated by the Phoenix market of course, Maricopa county. And we can see like the rest of the US the high end of Arizona is 21 days, the low end is a little slower. And then the speed is right in the middle there. Let's look at price reductions in Arizona really quick because I mentioned that Arizona typically has higher price reductions than the US. More of the homes typically take a price cut in, especially in the Phoenix area than, for example, in California.
Normally you'd even see Arizona price reductions over 40% of properties. But last year it was 14%. This year you can see we're at 25% and climbing. We can see the impact of rising rates on those price reductions in Arizona right now. If you're working with sellers in Arizona, this is your signal that it's time to price right. To move your house. And if you do, it's still going to move quickly.
Illinois Real Estate Data
Illinois, on the other hand, is a much less volatile market, much slower, immigration migration trends have been lower on the market action index. It’s still a strong seller's market because it's like that everywhere in the country, but there's an inventory trend in Illinois. It’s just barely starting to climb, still below last year at this time. And Illinois is lagging compared to the big migration markets like Denver and Arizona.
We can look at price reductions while we're here. In Illinois normally 35%, 40%. Last year we were down at 18%. And hasn't started turning up yet. So we have a little bit to go there and it's a little slower market.
Tampa Real Estate Data
Really quick, let's look at Tampa. Tampa prices have been rising. Inventory is starting to rise as well. Price reduction: a lot of speculation in Tampa lot of investor buyers. Tampa is normally in the 40% range with price reductions. Last year was 18% and now 25% and climbing rapidly. So we're going to get up here in the 35% range.
Again, this is the one of those opportunities where if you’re a seller don't over price unless you know what you're walking into. In Tampa, the biggest part of the demand is down here in the under $500,000, but really anything under $700,000 in these bottom three quartiles.
Okay. That's all the time we have for on the local markets.
If I get to this point in the conversation and people are often asking, “Mike, can you look at my market? What about my part of town?” We don't have time to do it all here, but we can go look at your local markets. All you got to do is go to altosresearch.com and book a consultation with our team. Book a demo. We will look at your local markets, we'll see how your market is changing. And we'll work with you about how to have this conversation with your buyers and sellers.
They've got all these headlines going on. The markets are crazy and everybody's afraid, inflation all of these things. But the fact is that if you're selling your house right now and it's moving quickly. If you're buying right now your mortgage is still, in the historical sense, ultra low.
And if you can afford that house, and you've been trying to buy for two years, maybe now is your time to buy. You can tell because here's all the demand that's still happening in the market. So those are the messages that you can give. So book time with our team, learn how to do it, use the ebook for the scripts and for the deep dive on how that data works.
I thank you so much for being with us. We had a huge crowd today. Very much look forward to you working with us at Altos. See you with the data on Monday. Thanks everybody.