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New American Focus:
Mortgage & Real Estate

New American Focus: Mortgage & Real Estate

Translating the complexity of the markets into a concise and easy to digest format. Watch videos, read blogs, and view key data on short and medium term trends impacting interest rates, so you can make the right decision for your situation.

Number of Homes on Market Plummets to All-Time Low

For Sale Sign | Homes on Market All-Time Low

One of the common themes in housing over the last several months has been how quickly homes are selling as buyers rush (and in some cases fight) to secure a new home. As for why competition has been so fierce, there simply have not been enough homes on the market to keep up with the demand.

And that problem is getting worse.

In fact, a new report shows that there are fewer homes on the market now than ever before.

According to realtor.com, the number of homes for sale in the U.S. fell to an all-time low in December, meaning there have never been fewer homes on the market than there are right now.

The report stated that there were less than 700,000 homes on the market in December, the first time the available inventory figure has ever been that low.

To put that figure in context, there were 449,000 more homes for sale in December 2019 than there were in December 2020, a decrease of nearly 40% in one year.

A number of markets saw their inventory fall by more than 50% in on year, including Riverside, California; Austin, Texas; Dallas-Ft. Worth; Charlotte, North Carolina; and Memphis, Tennessee.

If there’s one silver lining, it’s that newly listed homes in December were still down compared to last year, but not by as much as they were in November.

According to the report, the number of newly listed homes fell by 0.8% in December 2020 compared to 2019, up from November’s drop of 8.7%. The increase in homes for sale was led by the Western region, where there are nearly 31% more homes on the market than there were in 2019.

In fact, the two markets with the largest increase in new listings were both in California. Leading the way was the San Jose-Sunnyvale-Santa Clara metro area, where the number of homes on the market rose by nearly 124% in one year.

The next highest on the list of metros with an increase in new listings was the San Francisco-Oakland-Hayward area, where new listings rose by nearly 99%.

Perhaps not coincidentally, those two markets also have the highest listing prices ($1.182 million for San Jose and $995,050 for San Francisco), as homeowners in those areas are likely seeking to move from those expensive markets to more affordable ones given the rise in remote working.

Unfortunately, it looks like the inventory crush may continue as the number of willing buyers continues to exceed the number of willing sellers.

“The shortage of homes for sale has been an ongoing issue for the last couple of years, but in December the combination of the holiday inventory slowdown and the pandemic buying trend caused it to dip to its lowest level in history,” said realtor.com Chief Economist Danielle Hale.

“Looking forward, we could see new lows in the next couple of months as buyers remain relatively active, but a surge of new COVID cases may slow the number of sellers entering the market. Newly listed properties have shown mixed trends,” Hale continued.

 “While December's data points to possible relief on the horizon, this figure has been impacted the most in areas with large COVID surges, and consistent improvement will be key in order to get out of this extreme shortage,” Hale concluded. “We eventually expect to see improvements in the supply of homes for sale, especially in the second half of the year. Until then, finding a home will continue to be a top challenge for buyers across all price ranges."

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