A normal housing market follows the seasons and usually cools down during the winter. As you know, today’s market is anything but normal.
The number of active home listings across the United States keeps dropping lower and lower while selling faster than usual. It is shaping up to be a surprisingly hot winter housing market this year.
Lowest Level of Active Listings
The number of active listings keeps dropping and we have hit a new all-time low. Zillow senior economist Jeff Tucker explains how unusual it is,
“Home buyers angling for a bargain this winter are finding the shelves nearly bare, as inventory has shrunk even faster than in a typical November.”
The chart below from Redfin demonstrates the steep decline in listings this year.
House listings are down 25% from last year and a very sharp drop of 43% from 2019.
Homes Are Flying Off the Market
Fewer listings mean fewer choices for homebuyers. Even with less to choose from, strong demand for housing has homes being sold much faster than usual for this time of year.
Redfin’s report shows that we are doing slightly better than we were in the summer where we dipped down to 16 days for the median house to stay on the market.
Although 26 days is an improvement from this summer, this is still much lower than normal. Homes today are selling in almost half the time than they were two years ago.
More Homes Are Selling Above List Price
Nearly 43% of homes sold recently went above list price. Why do homes keep selling for higher than asking prices? According to Daryl Fairweather, Redfin’s chief economist, it’s a simple issue of supply and demand,
“The fact that homes keep selling for more and more above asking prices goes to show that many more people want a home than there are homes for sale… I don’t see that changing until mortgage rates increase, which will likely happen later this year. But until then, the housing market will remain red-hot.”
If we compare today with this time in 2019, the number of homes going for above the asking price was only 20%.
The housing market has struggled to meet demand in the past couple of years. Prices and competition will remain heated until more supply is available.
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