2nd Look at Local Housing Markets in June

Sales Down Sharply Year-over-year

This is the second look at local markets in June. 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.

We are seeing a significant change in inventory, and maybe a pickup in new listings. So far, most of the increase in inventory has been due to softer demand - likely because of higher mortgage rates - but we need to keep an eye on new listings too.

We are also seeing a sharp decline in closings in June, and this might be due to buyers cancelling escrow because of the increase in mortgage rates. Here is a table comparing the year-over-year Not Seasonally Adjusted (NSA) declines in sales this year from the National Association of Realtors® (NAR) with the local markets I track. So far, these measures have tracked closely, and the preliminary data below suggests a sharp decline in sales in June.

On cancellations, Lily Katz and Ben Walzer at Redfin wrote yesterday: The Deal Is Off: Home Sales Are Getting Canceled at the Highest Rate Since the Start of the Pandemic

Nationwide, roughly 60,000 home-purchase agreements fell through in June, equal to 14.9% of homes that went under contract that month. That’s the highest percentage on record with the exception of March and April 2020, when the housing market all but ground to a halt due to the onset of the coronavirus pandemic. It compares with 12.7% a month earlier and 11.2% a year earlier.

Active Inventory in June

Here is a summary of active listings for these housing markets in June. Inventory usually increases seasonally in June, so some month-over-month (MoM) increase is not surprising. However, for these markets, inventory was up 35% from May to June.

Inventory in these markets were down 35% Year-over-year (YoY) in January, still down 6% YoY in April, and are now up 47% YoY! 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), Santa Clara (San Jose), Mid-Florida (Tampa, Orlando), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta (included in state total)

   

New Listings in June

And here is a table for new listings in June. For these areas, new listings were up 6.6% YoY.

Last month, new listings in these markets were up 7.0% YoY. New listings have increased over the last two months - new listing were down YoY as recently as April - but overall, we aren’t seeing a huge surge in new listings in these markets.

Closed Sales in June

And a table of June sales. Sales in these areas were down 16.7% YoY, Not Seasonally Adjusted (NSA). As mentioned above, some of the decline in sales in June could be due to cancelled contracts. Mike Simonsen of Altos Research noted a pickup in home relisted this week:

Mike Simonsen 🐉 @mikesimonsen

Important demand indicator to watch: the % of homes that are getting re-listed. Re-lists rose to 1.7% this week, the highest rate in recent years A small but notable change When the bubble burst in 2007, relists in Silicon Valley climbed to 30% See the video for details 4/7

Contracts for sales in June were mostly signed in April and May, when mortgage rates were lower than in June, so we will probably see further declines in sales in July and August.

Much more to come!