Remember when Rob Dawg said “Forget all previous assumptions”?
Everyone has been assuming that once prices went back up, more inventory would appear. Those previously underwater would finally be free to sell, and other more-elective sellers who had been waiting patiently since the last peak would try again.
Well, here we are – prices are back to the previous peak. Except the number of new listings is going in the opposite direction – and compared to 2013, it’s getting worse.
Here are the NSDCC detached-home new listings:
Last year it happened as expected – pricing was up 10%, and the number of new listings picked up. The total was 7% higher than in 2012.
Pricing went up another 10% this year, but the number of listings dropped 6%.
When you trim down the time period further, it gets worse. Here are the new listings that hit the market between March 1 and April 15th:
Today, most people can sell for more money than ever. Yet heading into the prime selling season, there were 14% fewer new listings that hit the market this year, than in 2013 – even though pricing is up 13%!
Last year, the all-out frenzy was spurred by record-low mortgage rates, but also benefitted greatly from the sales momentum. More homes hitting the market meant more to gobble up, which caused prices to rise at a faster pace, causing other buyers to panic.
But now the move-up-or-down market must be particularly paralyzed by the lack of better choices. Those sellers who are leaving town feel like they’ve hit the jackpot. But for those wanting to stay in town, the tightening of inventory is frustrating, and they don’t want to list theirs unless they like their chances of buying a decent replacement.
It will probably feed on itself too, causing sellers to push prices higher – in spite of what Leslie said!
The fewer new listings could mask the actual buyer enthusiasm. A low inventory of active listings makes it appear that demand is high, but the lower counts could just be from fewer new listings overall.
With less to pick from this year, there will be fewer comps and more-scattered pricing results too. Get good help!