This report was originally published on Nov. 18, 2024, exclusively for subscribers of Intel, the data and research arm of Inman. Subscribe to Inman Intel for a deeper analysis of the business of real estate.
Throughout much of the U.S., the housing market’s trajectory has been simple to describe, at least in broad strokes.
New listings and home transactions remain depressed amid a period of stubbornly high mortgage rates, even as signs exist that a slow recovery may be well underway.
Inventory levels have been replenishing gradually after years of being stretched thin.
This story isn’t about those trends.
An Intel analysis of listing data from Realtor.com reveals three distinct regions whose real estate brokers, agents and clients are facing challenges unlike those in any other area of the country.
This report begins on the West Coast, whose high-priced megacities have been especially hard-hit by mortgage rates — but whose path forward might be increasingly well-laid. And it takes readers on a journey to other corners of the country where major markets are mired in their own alternate housing realities.
Read all the details in the full report.
1. The sleeping giants
Often, when a market experiences a major upswing in active inventory, it signals a market slowdown is underway.
That’s not what’s been happening lately in the West Coast’s highest-dollar housing markets.
Today, big cities in California and Washington state are experiencing an uncommon cocktail of factors that could signal better days are ahead for the real estate business in one of the most stagnant housing regions in the U.S.
Inventory has recovered sharply even as pending sales have recovered faster than in most places.
- Nowhere is this more apparent than in San Diego. The greater metro area there has witnessed a 63 percent rise in inventory year-over-year — the highest in the nation.
- Despite this, half of homes in San Diego sell in 34 days or less, compared to 58 days or less nationwide. And while that timeline has been rising, it’s been rising slower than the rate seen in other major U.S. cities.
Similar dynamics can be observed in other high-priced West Coast metros from Seattle in the north all the way down to Los Angeles.
Chart by Daniel Houston
This shift in inventory in these cities has also coincided not with falling prices as one might expect, but with surprisingly stable prices instead. And while a shift this strong might normally result in homes sitting for longer unsold, they remain on the market for less time than in most parts of the country.
- Across California, new listings were up 11 percent year over year in October, but remained 18 percent below pre-pandemic levels.
- Compare that to the U.S. as a whole, where new listings were up 5 percent year over year, and remained down only 11 percent compared to just before the pandemic began.
To be sure, these expensive metros remain in a depressed transaction environment compared to their pre-pandemic days, and likely will stay there until rates go back down again.
But unlike other places experiencing a rapid rise in inventory, the West Coast appears to be on a healthier trajectory from a brokerage point of view.
2. The mighty, still falling
From a pure active-listings standpoint, Florida appears to have much in common with California.
But the reality of their trajectories couldn’t be more different.
Once a hotspot for the pandemic-era housing boom, Florida is undergoing one of the nation’s most severe — and longest-lasting — downturns, with no end yet in sight.
Take the greater Miami area for starters.
- Like some of its counterparts on the West Coast, the Miami market has seen a 57 percent rise in for-sale inventory over the past year, among the highest in the nation.
- But half of homes in Miami are sitting on the market for at least 74 days before selling — more than twice as long as in San Diego.
- The list price per square foot was down 9 percent year over year in October in half of Miami homes for sale. That’s fundamentally unlike the 2 percent price gains observed nationally in that time, and well below the 1.7 percent rise that California listings have sustained through a similar inventory upswing.
It’s not just Miami, either. Florida markets including Tampa, North Port, Fort Myers, Orlando and Jacksonville are all roughly in line with this picture, to varying degrees. And all stand out from housing markets outside of the state.
In Florida, new listings have been falling fast — but sales have been falling faster.
As a result, homes are sitting for longer and longer on the market, active inventory has ballooned, and prices are falling faster than almost anywhere in the country.
Chart by Daniel Houston
Most U.S. housing markets hit bottom around a year ago. In Florida, the downturn is still in full swing.
3. Pandemic boom déjà vu?
In most parts of the country, today’s business climate could not be more different from the early pandemic homebuying frenzy.
But in pockets of the Northeast and Midwest, some of the key dynamics that characterized the pandemic boom have been upheld: particularly tight inventory, a seller-friendly imbalance and relatively stable home transaction levels.
Nowhere in the country is this more apparent than in the major population centers of Connecticut.
- The state as a whole remains extremely supply-constrained, with active listings in October that were 57 percent below their levels from early 2020. Nationwide, inventory had actually risen by 3 percent over the same period.
- Connecticut in October saw 30 percent fewer new listings come online than it did in February of 2020. Nationwide, new listings were down only 12 percent in that time.
Even amid this pronounced regional housing shortage, and despite an unfriendly rate environment in a relatively expensive region of the country, Connecticut has seen relatively high transaction levels.
The result? A greatly imbalanced environment in which buyers outnumber sellers, and prices continue to surge.
- The three Connecticut greater metro areas encompassing New Haven, Hartford and Bridgeport ranked 2nd, 3rd and 8th respectively among America’s 150 biggest population centers in year-over-year growth in median list price per square foot.
- All three metros had price growth above 11 percent year-over-year on a per-square-foot basis.
In other words, brokers and agents there are still living in an environment much like the rest of the country experienced during the pandemic boom.
To a lesser extent, Connecticut’s experience has been emulated in some of the other supply-constrained metros in that area of the country.
In the Midwest, similar dynamics — although in some cases less extreme — can be observed in Milwaukee, Detroit, and the Ohio metros of Cleveland and Dayton.
The major East Coast markets of New York and Philadelphia are also notable for their continued navigation of a low-supply environment and strong upward pressure on prices.
