Door-to-door sellers go on strike

The U.S. real estate market has entered its peak annual spring season where buyers and sellers are taking their decisions seriously. Only this year, there is something wrong: few houses are put up for sale.

According to (see chart below), only 349,284 US homes were listed for sale in March 2023. That’s below the 437,270 listed in March 2022—a period that was infamous for its tight supply— and well below the 478,100 listed in March 2019.

What is going on? Well, the sellers sort of went on strike.

You see, if someone is eager to sell their house right now looking for a new property, they will probably forgo their 2% or 3% mortgage rate…one of the biggest financial benefits of the pandemic-for a 6% mortgage rate. The thought of getting a significantly higher monthly mortgage payment keeps many potential buyers stuck. Cue fewer homes coming on the market.

That said, this pullback in new listings isn’t just being felt on the supply side, it’s also hitting the demand side. You see, if a particular owner decides to suspend the exchange of properties, it means that there is one less house on the market and one less buyer on the market.

To better understand the nuances of the Spring 2023 market, let’s take a closer look at the latest data.

The best way to describe the housing market over the past year is a struggle between a tight supply and deteriorated accessibility.

So do buyers or sellers have the upper hand?

Unlike the New list total (i.e. the number of houses put on the market in a given month), the active list total (i.e. the total inventory in the market) is a better indicator of a market’s equilibrium at any given time.

At first glance, it might be easy to assume that active listings/inventory (see chart below) is simply a measure of supply, but it is also a measure of demand. See, if buyers pull back and homes stay on the market longer, it can increase inventory levels (currently up 59.9% on a yearly basis) even if new listings (currently down 20 .1% on a year-over-year basis) decline.

What are the active listings/inventory telling us right now? The fact that open listings/inventory continued to decline through March suggests that sellers are regaining the upper hand over buyers. At least compared to the second half of 2022, when inventory was rising somewhat rapidly (more on this below).

Although stocks have fallen slightly in the first months of 2023, they remain well above the historically tight levels reached in the spring of 2022. Among the largest 400 markets Tracked by, 364 markets saw inventory (i.e., active listings) jump between March 2022 and March 2023. Nationally, total active listings/inventory increased by 59.9%, from 351,846 in March 2022 to active registrations in March 2023.

In places where inventory has risen the most, especially overheated markets like Austin (up 312% from last year) and Nashville (up 253%), this change of power was dramatic.

While buyers have seen their power increase from the frenetic spring 2022 market, that doesn’t mean we’ve transitioned into a buyer’s market. One of the reasons being, after all, that this stock jump hasn’t brought us back to a balanced market.

In fact, we are well below pre-pandemic inventory levels: the 562,565 active listings on in March 2023 were 49.5% lower than the 1.1 million active listings in March 2019 .

In theory, a market with inventories above pre-pandemic levels has seen power dynamics shift dramatically in favor of buyers. Markets with inventory levels well below pre-pandemic levels, on the other hand, have seen less dramatic change.

THE table available below provides active listings/inventory data for the nation’s 400 largest housing markets.

Of the nation’s 400 largest housing markets, only 14 have returned to pre-pandemic (i.e. 2019) inventory levels. This includes overheated markets like Idaho Falls and Logan, Utah. Meanwhile, 386 major markets are still below 2019 inventory levels.

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