2 Regions in the US Where the Housing Market Is Starting To Shift
As we navigate through the late-summer period, signs are emerging that the United States housing market may be on a path to recovery. Some industry experts suggest the market is “healing,” noting recent changes that hint at a shift in dynamics. However, with buyers and sellers keeping a wary eye on fluctuating mortgage rates, there remains a degree of unpredictability as we approach the latter half of August and the outset of September.
Recent data from Realtor.com indicates a surprising turn in median home prices. For the first time, July saw a seasonal decline in prices, deviating from what traditionally is a peak time for home sales. This shift suggests a cooling off in the summer housing market, possibly as participants wait for more favorable economic conditions before making their moves. Furthermore, the pace of home sales has slowed, hitting its lowest rate since 2020.
In addition, the total inventory of homes available for sale in July surged, approximately 37% higher than the previous year, marking nine consecutive months of expansion. “This post-pandemic high is a welcome indication that the housing market is normalizing,” Ralph McLaughlin, a senior economist at Realtor.com, stated. This growth in inventory was noted across all four regions of the U.S., with the South experiencing the most significant increase.
Shifts in the Southwest and Southeast
Delving into regional specifics reveals that the Southwest and Southeast are experiencing notable market shifts. An analysis from Fast Company highlights growing weakness in these areas, particularly around the Gulf and in portions of Florida. This contrasts with the tighter resale housing markets of the Midwest, Northeast, and Southern California.
One metric of concern is the extended period homes are remaining on the market in parts of Florida. In Naples-Marco and Panama City, for example, median days on the market were notably high, at 85 and 82 days, respectively. Fast Company’s evaluation also included an examination of active home listings, which can provide insight into future pricing trends. Rapid increases in listings, coupled with longer sales periods, may signal upcoming price declines. In contrast to the observed increases in the Gulf Coast regions and cities like Tampa and New Orleans, the inventory levels in the Midwest, Northeast, and West Coast remain significantly below pre-pandemic figures.
Looking ahead, the forecast for metro home prices between June 2023 and June 2024 suggests varied outcomes. While certain areas in the Northeast and Midwest are poised for considerable price growth, regions in Texas, Louisiana, Mississippi, and Southwest Florida are showing signs of softening or declining prices over the past year.
Conclusion
These insights into the housing market dynamics offer a nuanced understanding of how different regions are evolving. As the market continues to adjust post-pandemic, it’s clear that the path to recovery is not uniform across the United States. Both potential buyers and sellers would do well to stay informed about these regional trends as they navigate their real estate decisions in the coming months.
