1st Look at Local Housing Markets in February
It appears inventory has bottomed seasonally in some areas
This is the first look at local markets in February. I’m tracking about 30 local housing markets in the US. Some of the 30 markets are states, and some are metropolitan areas. I’ll update these tables throughout the month as additional data is released.
My view is that if the housing market starts slowing, it will show up in inventory first.
The following data is important, especially active inventory. One of the key factors for house prices is supply and tracking local inventory reports will help us understand what is happening with supply.
On a national basis, we saw record low inventory over the Winter. I’ll be watching to see if inventory follows the normal seasonal pattern and bottoms in February. Last year, inventory didn’t bottom until April.
Denver, Las Vegas, Nashville, 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
With 5.36 percent month-over-month appreciation and interest rates increasing, an individual's buying power steadily declined. While 2020 and 2021 took different paths, there is one common denominator: hyperactive buyer demand.
The first two months of 2022 were dictated by a lack of inventory and sales. By the end of February 2021, 8,761 properties hit the market. In 2022, the market has only seen 7,671, a 12.44 percent decrease in listings in two months. This number directly correlates with the 13.31 percent decrease in closed properties so far this year. The lack of supply coupled with the surplus of buyers has caused prices to rise quickly, leading to an unprecedented close-price-to-list-price ratio of 104.75 percent.
From Las Vegas Realtors® Run of record home prices continues in Las Vegas area; LVR housing statistics for February 2022
“Local home prices can’t keep going up this fast forever,” [LVR President Brandon] Roberts said. “The increases we’ve been seeing in the last year or so are just not sustainable. It remains to be seen how much higher these prices can go and when we might start to see the market stabilize, as many national experts have been predicting. Either way, I seriously doubt you’ll see home prices more than triple again in a single decade.”
By the end of February, LVR reported 1,741 single-family homes listed for sale without any sort of offer. That’s down from January, but up 3.8% from the same time last year. The 316 condos and townhomes listed without offers in February represent a 53.2% decrease from one year earlier.
From the Northwest MLS: Multiple offers "the norm" for home buyers, but may ease with uptick in listings
Multiple offer situations are the norm for today's home buyers, but some brokers with Northwest Multiple Listing Service suggest February's improving inventory and a slowing pace of price increases may ease some of the competitive pressures.
"Buyers in King County are jumping for joy over the nearly 40% increase in new listings that we saw in February compared to January (2,901 vs. 2,083)," noted Matthew Gardner, chief economist at Windermere Real Estate.
"Market activity is up across the board in Kitsap," stated Frank Wilson, branch managing broker and Kitsap regional manager at John L. Scott Real Estate. "We have more new listings (up 30.6%), more total active listings (up 36%), and more pending transactions (up 10%) compared to last year's numbers. Also, home prices continue to rise (up nearly 23%). This is concerning because we are just starting into the spring market."
Active Inventory in February
Here is a summary of active listings for these housing markets in February. Inventory was up 2.4% in February month-over-month (MoM) from January, and down 30.0% year-over-year (YoY).
It appears inventory has bottomed seasonally in some areas. Last month, these markets were down 38.8% YoY, so the YoY decline in February is smaller than in January. This isn’t indicating a slowing market, but maybe a few baby steps towards a more balanced market in some areas.
Notes for all tables:
New additions to table in BOLD.
Northwest (Seattle) and Santa Clara (San Jose)
Please share with your friends and colleagues!
New Listings in February
And here is a table for new listings in February. For these areas, new listings were down 2.6% YoY.
Last month, new listings in these markets were down 13.2% YoY.
Closed Sales in February
And a table of February sales. Sales in these areas were down 11.1% YoY, Not Seasonally Adjusted (NSA).
Much more to come!