After years of soaring prices and shrinking inventory levels, potential homebuyers are finally getting some good news.
A few key signs indicate that homebuyers might soon gain some ground in the housing market. To be sure, no one is predicting that we are entering an era of bargains galore. Any changes are likely to be modest, at least for now.
But here are a few reasons why buyers might be in a better position in the months ahead.
Home inventory levels keep growing
Nationwide, the number of homes for sale has now increased for 10 straight months, according to Realtor.com.
As of August, there were 35.8% more homes for sale than there were at the same time in 2023. The number of homes for sale is at its highest point since May 2020.
Here is Realtor.com’s breakdown of the year-over-year inventory increases in 10 key markets:
- Tampa-St. Petersburg-Clearwater, FL: 90.1%
- San Diego-Chula Vista-Carlsbad, CA: 80.4%
- Orlando-Kissimmee-Sanford, FL: 76.9%
- Miami-Fort Lauderdale-Pompano Beach, FL: 72.2%
- Seattle-Tacoma-Bellevue, WA: 69.3%
- Jacksonville, FL: 68.3%
- Denver-Aurora-Lakewood, CO: 66.8%
- Charlotte-Concord-Gastonia, NC-SC: 62.4%
- Atlanta-Sandy Springs-Alpharetta, GA: 58%
- Dallas-Fort Worth-Arlington, TX: 50.6%
All that inventory means buyers finally have more choices, and sales are slowing. During August, homes spent an average of 53 days on the market before selling, marking the slowest August in five years.
Home list prices are starting to fall in some markets
Asking prices for homes also are beginning to slip in many markets.
In a summary of Realtor.com findings, the site’s chief economist, Danielle Hale, said:
“This August, as the number of homes on the market continues to climb, price cuts are more common, asking prices are moderating, and homes are taking longer to sell. The widely anticipated Fed rate cut has already ushered in lower mortgage rates, but it seems that some buyers and sellers are waiting for additional declines.”
Overall, the median price of homes for sale in August slipped 1.3% year over year. Hale says rising inventory in today’s markets is creating “more balance between buyers and sellers.”
In August, median listing prices were down by the following:
- Miami-Fort Lauderdale-Pompano Beach, Fla.: -11.7%
- San Diego-Chula Vista-Carlsbad, Calif.: -9.1%
- Kansas City, Mo.-Kan.: -8.5%
- San Francisco-Oakland-Berkeley, Calif.: -7.7%
- Austin-Round Rock-Georgetown, Texas: -7.6%
- Oklahoma City, Okla.: -7.3%
- Cincinnati, Ohio-Ky.-Ind.: -6.7%
- Tampa-St. Petersburg-Clearwater, Fla.: -6.2%
- Denver-Aurora-Lakewood, Colo.: -6.1%
Condo prices have tumbled in some metros
Condo prices have begun to fall in major metros in both Florida and Texas, real estate brokerage firm Redfin reports.
The inventory of condos for sale is growing fast in some cities. The number of condos for sale in Tampa during July soared 57.2% year over year. In Houston, inventory jumped 35.9%.
The glut of inventory is pushing prices lower in these places. Higher insurance costs and rising homeowners association fees also are making condos a tougher sell in some markets. Here is a sampling of year-over-year condo price declines from July 2023-July 2024 in a few key metros:
- Houston, TX: -6.5%
- Jacksonville, FL: -6.6%
- Tampa, FL: -4.9%
- Fort Lauderdale, FL: -4.2%
- Miami, FL: -2.9%
- San Antonio, TX: -2.2%
- Austin, TX: -1.9%
Florida and Texas are not the only markets to see declines. Earlier this year, Newsweek reported that in some parts of California, condo sellers were slashing their asking prices.
At the time, the publication said that of 8,476 California condos listed for sale on Zillow, 1,973 had price reductions, with some cut by as much as 40%.
The majority of price cuts were in markets in and around Los Angeles, San Francisco and San Jose, according to Newsweek.
Do falling condo prices in parts of Florida, Texas and California presage a trend that will spread to other markets? Time will tell.
Is now the right time to buy a home?
Despite the signs that the housing market is becoming a friendlier place for buyers, it is important to remember that all real estate is local. Prices can drop in one community, but soar in another.
Ultimately, trying to divine housing market trends is likely to be as foolish — and unfruitful — as attempting to time the stock market.
Instead of trying to guess where housing prices are going, focus on the things you can control. Decide whether this is the right time for you to buy a home irrespective of where the market might end up.
Then, take the steps necessary to shore up your finances so you are in a good position to get a house you want at a price you can afford.
And to help protect yourself from making costly mistakes, check out “7 Dumb Mistakes That Cost Homebuyers Tons of Money.”
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