1st Look at Local Housing Markets in May, Inventory up Sharply

"Home sellers really need to re-think their expectations"

This is the first look at local markets in May. I’m tracking about 35 local housing markets in the US. Some of the 35 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.

My view has been that the slowdown in the housing market would show up in inventory first. And we are seeing a significant change in inventory over the last few months!

The following data is important, especially active inventory. On a national basis, we saw record low inventory levels over the Winter. Last year, inventory didn’t bottom seasonally until early April. This year inventory bottomed in February (normal seasonal timing).

The NAR reported inventory was down 10.4% year-over-year in April. Since then, other sources, such as Altos Research and Realtor.com, indicate active inventory was up year-over-year in May. I expect the local market reports will show inventory up year-over-year in May too.

Denver, Las Vegas, Northwest, San Diego and Santa Clara

Here are a few local comments …

From Denver Metro Association of Realtors® (DMAR): DMAR Real Estate Market Trends Report

After consecutive months of appreciation, negotiations and bidding wars, modest numbers this month became a sign that the market has returned to a semblance of ‘normal.’ … “As summer approaches, and Denver continues to see a shift from the peak of the real estate market, we will see changes in how the market operates compared to the beginning of the year,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Denver Metro’s housing market will be the story of two halves. The first of the year with unprecedented appreciation and the second half of the year with a return to normalization.

emphasis added 

From Las Vegas Realtors® Home prices set another record amid signs of a shift in local housing market, LVR housing statistics for May 2022

  “The slowdown in sales and increase in our housing supply are signs that things may be starting to calm down a bit,” [LVR President Brandon] Roberts said. “Even though prices are still going up, it’s welcome news for potential buyers to see more homes on the market. As we’ve been saying for months, the rate of appreciation we’ve seen over the past year or two seems unstainable.”

By the end of May, LVR reported 3,570 single-family homes listed for sale without any sort of offer. That’s up 75.8% from the same time last year. Likewise, the 797 condos and townhomes listed without offers in May represent a 50.7% jump from one year earlier.

From the Northwest MLS: Western Washington housing market "more balanced, and not so crazy - and that's a good thing"

"Home sellers really need to re-think their expectations," suggested Mike Larson, a member of the board of directors at Northwest Multiple Listing Service (NWMLS) when commenting on statistics summarizing May activity. The new report showed a significant increase in active listings compared to a year ago, a slowdown in sales, and prices still rising.

Larson, the managing broker at Compass in Tacoma, said the days of "multiple offers and waived inspections, at least in Pierce County, are behind us." He described the market as "more balanced and not so crazy, and that's a good thing. Buyers are getting a little relief - not much, but a little as we're slowly easing back into the kind of market we had pre-COVID."

Active Inventory in May

Here is a summary of active listings for these housing markets in May. Inventory usually increases seasonally in May, so some month-over-month (MoM) increase is not surprising.

Inventory in these markets were down 28% YoY in February, down 4% YoY in March, up 10% YoY in April, and up 42% YoY in May! So, this is a significant change from earlier this year. This is another step towards a more balanced market, but inventory levels are still historically low.

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle) and Santa Clara (San Jose)

   

New Listings in May

And here is a table for new listings in May. For these areas, new listings were up 4.7% YoY.

Last month, new listings in these markets were down 3.7% YoY. San Diego pulled this down in May. But overall, we aren’t seeing a huge surge in new listings in these markets.

Closed Sales in May

And a table of May sales. Sales in these areas were down 6.9% YoY, Not Seasonally Adjusted (NSA).

Much more to come!