Final Look at Local Housing Markets in January

Year-over-Year: Sales Down Sharply, Inventory Increased, New Listings Down

The big story for January existing home sales was the sharp year-over-year (YoY) decline in sales. Also, active inventory increased sharply YoY, but is still historically low.

This is the final look at local markets in January. I’m tracking about 40 local housing markets in the US. Some of the 40 markets are states, and some are metropolitan areas. I update these tables throughout each month as additional data is released.

First, 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. The NAR reported sales were down 34.4% NSA YoY in January.

Active Inventory in January

Here is a summary of active listings for these housing markets in January.

Inventory in these markets were down 27% YoY in January a year ago and are now up 53% YoY! So, this is a significant change from a year ago, and a larger YoY inventory increase than in December (up 48% YoY).

Notes for all tables:

1. New additions to table in BOLD.

2. Northwest (Seattle), Santa Clara (San Jose), Jacksonville, Source: Northeast Florida Association of REALTORS®

3. Totals do not include Atlanta, Denver or Minneapolis (included in state totals)

   

New Listings in January

And here is a table for new listings in January. For these areas, new listings were down 7.7% YoY. Potential sellers that are locked into their current homes with low mortgage rates has pushed down new listings.

Last month, new listings in these markets were down 21.4% YoY. This is a significantly smaller YoY decline in new listings, and something to watch. There are certain markets - like Austin, Georgia and parts of Florida - where new listings were up YoY!

Closed Sales in January

And a table of January sales.

In January, sales were down 33.6% in these markets. In December, these same markets were down 35.7% YoY Not Seasonally Adjusted (NSA).

Note: Even if existing home sales activity bottomed in December (4.03 million SA) and January (4.00 million SA), there are usually two bottoms for housing - the first for activity and the second for prices. See Has Housing "Bottomed"?

More local data coming in February for activity in January!

Important: Closed sales in January were mostly for contracts signed in November and December. Mortgage rates, according to the Freddie Mac PMMS, decreased to around 6.4% in December and 6.3% in January, so that will likely provide a small boost to closed sales in February.

My early expectation is we will see a somewhat smaller YoY sales decline in February, than in January, due to the decrease in mortgage rates in December and January.

However, in the 2nd half of February, mortgage rates have spiked again, and the MBA purchase index fell to the lowest level since 1995!

This increase in mortgage rates, and decline in purchase applications, will impact closed sales in March and April.