According to the latest RE/MAX National Housing Report, signs are pointing to a more balanced housing market among U.S. homebuyers and sellers. The shift, seen in metros measured in the report, is largely driven by inventory gains, a drop in home prices and an increase in days on market on average. With inventory growing, some of the homebuying obstacles created years ago by the Great Recession – and more recently by the lag in new construction – are starting to be addressed.
Reflecting on the long sellers’ market much of the U.S. has been experiencing, RE/MAX President and CEO Nick Bailey believes the U.S. has had a Days on Market problem as much as a supply and demand problem in recent years.
The average Days on Market for homes sold in September 2022 was just over one month at 34 days, up five days from the average in August 2022, and up six days from the average in September 2021. Other headwinds like affordability have contributed to the imbalance in favor of sellers, but the pressure consumers surely feel to make purchasing decisions so quickly – on what’s likely one of the biggest financial transactions of their lives – has played a role in market volatility.
Case in point: those who fought tooth and nail to purchase a home with wood paneling and shag carpet to achieve the American dream of homeownership may benefit from watching Bailey’s recent Keepin’ It Real segment on home remodeling and increasing return on investment.
With September home sales declining 9.7% from August across the report’s 53 metro areas, the typical seasonal slowdown has led to inventory growing 3.9% over August.
Now with both supply and the number of days between when a home is first listed in an MLS and a sales contract is signed inching up, chins are starting to lift too.
“After a sustained period of quick sales that kept the housing cupboard relatively bare, a supply of two months presents a lot more options for homebuyers,” Bailey says in the housing report. “For a long time, six months of inventory was the standard for a balanced market that favored buyers and sellers evenly. Now, with the evolution of technology and various changes in homebuying patterns, the new standard is becoming four months. We’re halfway to that level, and the market is making steady progress toward balance. Home sales are still happening, and having the right real estate professional by your side is critical for consumers looking to take advantage of the market conditions.”
In Manchester, NH, Months Supply of Inventory sat at one month and Days on Market was at 16 days in September 2022. Tim Morgan of RE/MAX Insight in Manchester pointed out that even with national trends rebalancing a bit, the most important thing to keep in mind is that real estate is hyper-local – and what’s happening in one area might not be reflective in another.
“We will notice the days on market creep up a little bit and not as many multiple offer situations,” he says. “Real estate is still very regional so some markets will continue to be hot while others cool down more.”
Here’s the need-to-know data from the U.S. metro areas surveyed for the September 2022 RE/MAX National Housing Report:
Homebuying Cooled This Fall
In line with seasonal trends, September home sales declined 9.7% from August across the report’s 53 metro areas. Year-over-year, September home sales were down 23.5%. The markets with the biggest decrease in year-over-year sales percentage were Las Vegas, NV at -39.4%, Bozeman, MT at -38.4%, and Salt Lake City, UT at -36.5%. Only one metro area had a year-over-year sales percentage increase: New Orleans, LA at +10.4%.
For the Second Month in a Row, Homes Sold for Less than Asking Price
The average Close-to-List Price Ratio in September was 99%, meaning that homes sold for 1% less than the asking price for the second consecutive month after being at 100% or above through the first seven months of 2022. The metro areas with the lowest close-to-list price ratio were Miami, FL at 95%, followed by a five-way tie between Bozeman, MT, New Orleans, LA, Coeur d’Alene, ID, Phoenix, AZ, and Las Vegas, NV at 97%. The highest close-to-list price ratios were in Burlington, VT at 104%, Hartford, CT at 102%, followed by a six-way tie between Richmond, VA, Manchester, NH, San Francisco, CA, St Louis, MO, Trenton, NJ, and Boston, MA at 101%.
Supply Continues to Improve
Although still falling short of demand, the number of homes for sale has grown in five of the past six months. September’s two months’ supply of inventory jumped from 1.6 months in August and 1.3 months a year ago. The National Association of REALTORS® last reported months’ supply of inventory above two in November of 2020, when it was 2.3. In September 2022, the markets with the lowest months’ supply of inventory were Albuquerque, NM at 0.9, followed by a five-way tie between Charlotte, NC, Dover, DE, Hartford, CT, Manchester, NH, and Trenton, NJ at 1.0.
Ready to make a move? Contact a local RE/MAX agent today.
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Written by SAMANTHA ROTBART
