How fast is available home inventory climbing?

Available home inventory is increasing quickly

According to the most recent data from Altos Research, the number of homes for sale is increasing at a faster rate than last year. Based on the data, the increase in available homes is driven by the lack of demand. The numbers aren’t showing a supply surge, but they are showing that the amount of available options for homebuyers is increasing as buyers stay out of the housing market.

It appears that inventory may continue to increase through the end of October. The winter tends to see a drop in overall listings, unless there’s an event that spurs additional home sales.

Weakening demand is also starting to show up in some of the pricing indicators that Altos tracks. For example, homes on the market that have seen a price cut are at 37.0%. Last year’s numbers were higher, but this is well above the housing market from 2018 to 2021. Price reductions also appear to be accelerating.

This could indicate that home prices will start to soften in an effort to lure buyers off the sidelines and back into the market.

How to make sense of the current housing market?

Have you struggled to understand the how’s and why’s behind the current housing market? You’re not alone. A lot of folks have the same questions and the team at Realtor.com put together an explainer to help.

They spoke with several experts to get a better understanding of why the market it is the way it is.

When it comes to home prices, chief economist of Realtor.com, Danielle Hale, stated, “A lot of buyers are surprised that prices have held on as long as they have. Demand and supply are relatively balanced, so that has kept prices roughly stable at very high levels.”

On the subject of mortgage rates, it’s important to remember that lenders don’t set rates. They’re influenced heavily by the bond market, which is influenced by the interest rates that the Federal Reserve sets. Laurie Goodman, a fellow at the Urban Institute, said higher mortgage rates reflect “the fact that there’s a lot of uncertainty around interest rates the Fed controls and what the future of the economy is.”

Which suburbs are wealthy homebuyers flocking to?

Homebuyers looking for luxury properties will often want metro areas like New York City, San Francisco or Miami, but some folks want to live in luxury and live away from cities.

A recent report detailed the suburbs that high-end buyers tend to prefer. Five towns made the list. Two were in Nevada, two were in Florida, and Frisco, TX claimed the fifth spot.

Summerlin and Seven Hills in Nevada were two of the more popular suburbs in the Las Vegas area and both were highlighted by industry experts.

Melissa Zimbelman, a realtor and property manager with Luxe International Realty & Property Management, stated, “In the Las Vegas area market, we have a well-known west-side ‘suburb’ that is owned/run by the Howard Hughes Corporation. While still technically part of Las Vegas, it is a master-planned community called Summerlin. It has been voted the top master-planned community in the nation for many of the last 33 years it has existed.”

Zimbelman also mentioned the Seven Hills area and said, “Seven Hills also features amazing luxury homes and high-end retail and restaurants. Tucked into the hills and surrounded by stunning golf courses, many of these areas/homes also have gorgeous Las Vegas Strip/city views.”

Winter Park and Windermere were the two Florida towns that made the list. Lisa Rutkowski, a real estate advisor with Premier Sotheby’s International Realty, said, “Winter Park is considered a destination town. Just north of the city of Orlando, you’ll find residents walking their dogs and driving down Park Avenue in custom Mokes and golf carts.”

A town in the same class as Winter Park, Windermere, FL is also a destination for wealthy homebuyers. Rutkowski stated, “Some of Central Florida’s most expensive, exclusive homes are located within Windermere and Winter Park. While the average price per square foot for real estate in each of these communities is approximately $330, the square footage and features that homeowners desire here are impressive!”