A rapidly growing share of listings are becoming stale as the housing market cools, according to a new report.
The share of homes listed for 30 days or longer increased 12.5 percent in July compared to a year earlier, with 61.2 percent of homes now sitting on the market for a month or longer, according to a report released Tuesday by Redfin.
The annual increase in stale listings is the biggest since April 2020, when the housing market temporarily ground to a halt at the onset of the coronavirus pandemic. It’s also one of the largest year-over-year decreases since Redfin started tracking the data point in 2012, according to the report.
Homes are staying on the market longer as the market shifts in response to higher mortgage rates, which currently sit just below five percent after peaking at 5.81 percent earlier this year, causing many buyers to pull back. The increase in stale listings is a result of months of decreased buyer activity causing inventory to pile up, according to the report.
Homes sitting on the market for 30 days or more is a far cry from the low-rate market of just a few months ago, when inventory hit rock bottom levels and bidding wars became a norm.
“People want to know whether we’ve officially shifted from a seller’s market to a buyer’s market. While there’s not a clear line separating those two ideas, homes sitting on the market longer is a point in buyers’ favor,” Redfin Deputy Chief Economist Taylor Marr said in a statement. “Buyers can take their time making careful decisions about homes without worrying so much about bidding wars, offering over the asking price and waiving contingencies. It’s a different story for sellers, who have spent the last two years hearing about their neighbors’ homes getting multiple offers the day they go on sale. Now they need to price lower and get back to the basics of selling a home, like staging and sprucing up painting, to get buyers’ attention.”
The markets with the largest shares of stale inventory are currently Oakland, where the share homes sitting on the market for more than a month was up 60.7 percent annually in July, followed by Phoenix (54.5 percent), and Austin (50.9 percent). Those markets all heated up to previously unseen levels during the pandemic, and have since begun to reverse course during the first half of 2022, the report notes.
Although time on the market has hit a pandemic high, it’s still at historic lows. Time on market is still currently lower than both 2019 and 2018 levels, according to the report.