Uptick in inventory means less competitive frenzy. High end of market particularly opening up.
Skewed Sellers’ Market Coming Back to Earth
After watching home prices soar, more and more owners who said they weren’t interested in selling “now or ever” are changing their minds. Likewise, some “once-in-a-lifetime- dream-house-deals” have collapsed and are now back on the market.
The result? Some over-priced homes are now languishing on the market.
Andrea Ackerman, an agent with Brown Harris Stevens in the Hamptons on Long Island’s East End, said, “The sales market is not a frenzy anymore.”
Demand High But No Longer Urgent
Demand still remains strong but, according to Chris Itteikag with Washington Fine Properties, …”if very desirable properties are overpriced or need renovation, It’s more hit or miss…”
Some buyers, Itteikag said, are taking a break from house hunting altogether…they are simply“fatigued by high prices and competition from bidding wars.”
Growing Inventory Taking the Edge Off
According to the National Association of REALTORS (NAR), May 2021 was the fourth consecutive month in which existing home sales dropped nation-wide. In June, the number of new listings increased +11% m/m, according to Realtor.com’s Monthly Housing Report.
Summing up the changing housing market environment, Jonathan Boxer, an agent with Douglas Elliman in Aspen CO, said, “We all felt, 60 days ago, that we were literally going to run out of inventory. And then things shifted. We started bringing on some new sellers.”
Price Growth Cooling
In agreement with Boxer (without knowing it) about increasing inventory levels, George Ratiu, senior economist with Realtor.com, noted that price growth across the country has begun to slow due to rising inventory levels. Spurred by increasing inventory levels, Ratiu said that the median listing price grew +12.7% y/y in June but comparing June’s +12.7% increase to the jump of +17.2% in April is a big step forward. Ratiu said, “…this current market beginning to look a lot more like a normal market.”
Cooling price growth is particularly pronounced in higher-end properties. For example, in the tiny hamlet of Orient on the North Fork of Long Island, monthly listings increased +62.5% m/m in June, according to Realtor.com, and price reductions are creeping back in to agent and consumer conversations.
On a larger scale, more luxury listings are hitting the market than lower-price homes. According to Realtor.com, the number of new listings priced over $1M jumped +17.5% the week ending June 19 while the number of new listings priced under $350,000 dropped -7.4%. Year-over-year, inventory of homes priced over $1M was still down by -23% but the number of homes priced under $350,000 fell -49%.
Thanks to The Wall Street Journal and realtor.com.
