Anyone who embarked on the journey of house hunting last year encountered not only high mortgage rates but also the challenge of limited homes for sale. These issues were intertwined, with high rates creating a “lock-in” effect, discouraging homeowners from listing their properties. However, recent data indicates a shift in the housing market landscape, offering a glimmer of hope for both buyers and sellers.
The National Picture: A 4.9% Increase in Home Inventory
A recent report from Realtor.com® reveals a positive trend in the housing market. In December 2023, the number of homes for sale increased by 4.9% compared to the same month the previous year. Notably, new home sellers entering the market rose by an impressive 9.1%. While this signals a potential shift, it’s important to recognize that the inventory levels are still below the robust figures seen in 2017 to 2019, pre-COVID-19.
Regional Variations: Winners and Losers in the Housing Inventory Game
Winners in the South: A 7.7% Growth
The South emerged as a frontrunner in housing market growth, with a 7.7% increase in inventory year over year. Notably, Florida led all states with an impressive 27% surge in active listings. The region’s affordability, coupled with an abundance of new construction, has attracted new residents, contributing to a more dynamic market.
Losers in the Northeast: An 8% Decline
In contrast, the Northeast witnessed a decline in homes for sale, dropping by 8% annually in December. High buyer demand and limited inventory, exacerbated by a lack of available land for new construction, contributed to this decrease. Connecticut and New Jersey led the pack-in inventory decreases, showcasing the impact of increased flexibility in remote work post-pandemic.
Recalibration in the West: A 14.8% Decrease
After a significant surge in inventory in late 2022, the West experienced a recalibration in 2023. The number of homes for sale dropped by 14.8% year over year in December, suggesting the market was “catching up” after the previous year’s rapid growth.
Steady Midwest: A 0.2% Increase
The Midwest demonstrated a more moderate and steady market adjustment, with a marginal increase of 0.2%. Fort Wayne, IN, stood out as the city with the most significant inventory growth, showcasing the region’s balanced market conditions.
The housing markets with the biggest inventory jumps
1. Cape Coral, FL
Median home list price in December: $475,415
Active listings in December: 8,449
Year-over-year inventory increase: 99.3%
2. Eugene, OR
Median home list price: $522,450
Active listings: 644
Year-over-year inventory increase: 46.7%
3. Fayetteville, NC
Median home list price: $309,706
Active listings: 960
Year-over-year inventory increase: 42.2%
4. Gulfport, MS
Median home list price: $294,950
Active listings: 1,501
Year-over-year inventory increase: 35.7%
5. Corpus Christi, TX
Median home list price: $359,000
Active listings: 2,231
Year-over-year inventory increase: 34.1%
6. Lafayette, LA
Median home list price: $270,000
Active listings: 1,143
Year-over-year inventory increase: 32.1%
7. Little Rock, AR
Median home list price: $299,900
Active listings: 1,756
Year-over-year inventory increase: 30.7%
8. Mobile, AL
Median listing price: $249,900
Active listings: 1,024
Year-over-year inventory increase: 30.3%
9. Memphis, TN
Median home list price: $317,990
Active listings: 3,428
Year-over-year inventory increase: 28.5%
10. Fort Wayne, IN
Median home list price: $299,900
Active listings: 697
Year-over-year inventory increase: 27.0%
Looking Ahead: 2024 Predictions
As we enter 2024, experts predict that mortgage interest rates may continue to decrease, potentially bringing more homes onto the market. This forecast bodes well for both buyers and sellers, setting the stage for a more balanced and vibrant housing market.
Conclusion: Navigating the Changing Landscape
The evolving dynamics of America’s housing market paint a varied picture across regions. While some areas experience robust growth, others navigate challenges posed by high demand and limited inventory. As we move forward, keeping an eye on these regional nuances will be crucial for anyone involved in the real estate market, whether as a buyer, seller, or industry professional.
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