For the first time since May 2023, the real estate market is witnessing an increase in unsold homes, offering a glimmer of hope to home buyers, sellers, and investors. According to the Realtor.com® December Monthly Housing Trends Report, there’s been a notable upswing in inventory levels across the U.S., particularly in the South, which experienced a 7.7% increase in active listings year-over-year.
This development signals a potential shift in the housing market dynamics that have been largely seller-driven in recent times, due to low inventory and high demand. As mortgage rates continue their downward trajectory since November, the real estate sector is poised for an increased home-selling sentiment and the possibility of more new listings entering the market.
“Though the uptick in December inventory levels is encouraging, the number of homes on the market is still low relative to pre-pandemic levels,” said Danielle Hale, chief economist, Realtor.com®. “Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes.”
Despite the holiday season, when real estate activity usually slows down, December 2023 saw 9.1% more newly listed homes compared to last year. The month-over-month change between November and December saw a modest 5.5% decrease, indicating a smaller than typical drop for this time of year.
On a regional level, Memphis, New Orleans, and San Antonio led the pack with the most significant growth in inventory levels among the 50 largest metros. Interestingly, San Antonio, Austin, and New Orleans all showed higher levels of inventory in December 2023 compared to typical 2017 to 2019 levels, bucking the national trend.
While the median price of homes for sale in December remained relatively stable, growing by 1.2%, some regions like San Jose, San Antonio, and Memphis experienced a decrease in median listing price year-over-year.
Furthermore, homes are moving quicker than before. Homes spent 61 days on the market, four days shorter than December 2022 and about two weeks shorter than before the COVID-19 pandemic. This trend suggests that despite the increased inventory, demand remains strong.
For home buyers, sellers, and investors, these trends offer valuable insights. Buyers may find more choices and less competition, sellers might see more motivated buyers, and investors could find new opportunities for growth. All eyes will be on the housing market in the coming months to see if these trends continue into the peak summer season.
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