Number of homes listed for sale jumps 12.5% in a month as ‘it’s now a buyers’ market’  

The number of homes staying up for sale for 30 days or longer rose by as high as 60 percent in some areas, with a 12.5 percent rise in July from last year, as experts say the US is shifting to a buyer’s market.

About 61.2 percent of homes listed for sale stayed on the market for at least 30 days, up from 54.4 percent in July 2021, according to a new Redfin report.  

Among the major cities where the most homes are staying on the market compared to last year were Oakland, at 60.7 percent;  Phoenix at 54.4 percent; and Austin at 50.9 percent; while Fort Lauderdale, Florida, was the sole city that saw a decline at 0.9 percent. 

Redfin economists said the homes were staying on the market longer due to the housing market’s response to increasing mortgage rates and federal interest rates, causing buyers to slow down and examine their choices.

‘Buyers can take their time making careful decisions about homes without worrying so much about bidding wars, offering over the asking price and waiving contingencies,’ Redfin Deputy Chief Economist Taylor Marr wrote in the report. 

‘It’s a different story for sellers, who have spent the last two years hearing about their neighbors’ homes getting multiple offers the day they go on sale. Now they need to price lower and get back to the basics of selling a home, like staging and sprucing up painting, to get buyers’ attention.’

The shift follows dramatic interest rate hikes by Federal Reserve since May, with the market yet to fully react to the latest hike at the end of July as the central bank says additional increases are expected this year in order to combat inflation.   

July 2022 marks the first year-over-year increase in ‘stale’ housing supply since the start of the pandemic, with Redfin defining stale as homes that were on the market for at least 30 days without going into contract. 

It’s also the second largest increase in a decade, only beaten out by a 13.9 percent rise in April 2020, when the housing market fell to a halt due to COVID. 

Redfin also found that the number of homes up so sale for over two weeks and over two months were also up from last year, rising by 7.6 percent and 6.8 percent, respectively.  

The stale housing supply comes after a year favoring sellers, where competition was high and homes flew off the market. In July 2021, the typical home went under contract in just 15 days, according to Redfin.  

The race to buy a home was driven for the most part by low mortgage rates and the Federal Reserve dropping interest rates to near zero amid the pandemic. 

The average 30-year fixed rate mortgage was just 3.3 per cent in the first full week of 2022, per the Mortgage Bankers Association. 

Those conditions have since reversed, with the Fed hiking rates by near-record percentage points in order to combat rampant inflation, which reached 9.1 percent in July. 

As interest rates rose, mortgage rates followed suit, hitting nearly 6 percent in July before cooling off at about 5 percent as of August 4.

Christopher Johns, a Redfin real estate agent based in Houston, Texas, confirmed that the market has seen a complete turnaround. 

‘The market did a 180-degree turn from early spring to late spring, with buyers backing out because of high mortgage rates,’ he said. 

‘A lot of sellers are telling me they feel that they’ve missed out on the hot market.’ 

Stale inventory has seen the biggest increase in Oakland, California, were the number of homes up for sale that stayed on the market for 30 days or more rose by 60.7 percent compared to last year. 

In Phoenix, stale inventory rose by 54.4 percent since 2021, and in Austin, it was up 50.9 percent. 

The other major cities that made up the Top 10 were Anaheim, California, at 49.7 percent; Riverside, California, at 46.7 percent; Fort Worth, Texas, at 43.4 percent; Dallas at 42.9 percent, Washington D.C. at 42.5 percent, Sacramento, California, at 41.7 percent; and Seattle at 41.3 percent. 

Fort Lauderdale, Florida, was the sole major U.S. city to see a decline in stale inventory, seeing a decrease of nearly 1 percent. 

Experts said the uptick in stale inventory is likely to stabilize soon and better reflect what the housing market was in the pre-pandemic era. 

Johns said he’s reiterating this to his clients: ‘I’m reminding prospective sellers that we’re not in a housing-market crash; it’s a correction. 

‘If sellers list their home for slightly less than they would have five months ago, they’re still likely to get a solid offer. 

And my advice to buyers is to remember that 5 percent rates aren’t the end of the world; they can always refinance in the future if rates go down.’ 

The shift to a buyer’s market is expected to bring down the price of homes throughout the U.S., with Redfin and Zillow suggesting the drop will be felt where the markets were the hottest. 

Redfin predicts Riverside has the highest chance of seeing its housing market cool further if the US enters a recession. 

Number-two on their list is Boise, Idaho, followed by Cape Coral, Florida; North Port, Florida; Las Vegas; Sacramento; Bakersfield, California; Phoenix; Tampa, Florida; and Tucson, Arizona.

A recent report from Zillow showed competition in red-hot markets like, San Jose; San Francisco; Seattle; and San Diego — all among the five most expensive cities in California.

Salt Lake City, at 24.1 percent, Sacramento at 21.7 percent and Phoenix at 20.4 percent are seeing the highest shares of price cuts.

Nationally, home-price appreciation slowed for the third consecutive month in June. Zillow attributes ‘affordability obstacles’ as the likely reason behind this.

Zillow also found that most sellers were listing homes in the South, making up 39 percent of the market, with the Midwest following at 23 percent, and the West coming in third at 22 percent. 

Sellers in the Northeast made up only 15 percent of the market.