According to RE/MAX, the number of homes for sale increased in June 2022, while home prices stabilized.
The first half of 2022 has come and gone. And, based on early indications and several results from June, the ultra-competitive, multiple-offer conditions for homebuyers may be gone too, it seems. According to the latest RE/MAX National Housing Report, although June posted the most home sales of any month thus far this year, home sales were down more than 17% from June 2021. Change – and a bit more balance – is in the air.
The astonishing run-up of home prices seen in the past few years seems to have calmed. According to the report, the median sales price of all 53 metro areas included was $428,000, up just 0.6% compared to May 2022. RE/MAX President and CEO Nick Bailey credits the signs of a more balanced market to recent inventory gains and the rise in interest rates.
“The market is moving toward greater balance, especially with inventory gains and the slowing of price appreciation. The past few years have been one of the most competitive times ever for buyers – and we’re finally seeing conditions ease up,” says Bailey.
“It’s due partly to the rise in interest rates – although buyers are also finding solutions in ARMs, FHA products and other financing – but even more significant is the increase in listings after several years of instant sales and low inventory,” he continues. “Markets like Nashville and Phoenix saw an increase in new listings of over 20 percent last month, bringing new options for buyers who may have sidelined themselves in the frenzy of last year.”
RE/MAX Professionals Owner Nate Martinez, based in Phoenix, Arizona, was quoted in the report about the rebalance taking place in his local market.
“The Phoenix metro area is in the process of a market shift from a red-hot market to more of a balanced market,” said Martinez. “With inventory increasing, we’re seeing more opportunities for buyers, a leveling of home prices and a reduction in homes selling with multiple offers.”
Despite the slowing of home price appreciation on a national scale and in some markets across the U.S., many markets are still seeing significant year-over-year increases. In Atlanta, the Median Sales Price rose more than 18% year-over-year, averaging over $400,000 in June 2022. Kristen Jones, Broker/Owner of RE/MAX Around Atlanta in Georgia, said in an interview with Atlanta Agent Magazine, “buyers who can purchase at today’s rates probably should.”
In a win for buyers, inventory increased for a third consecutive month, according to the report. New listings and a growing supply of available properties affords homebuyers more options to choose from. While demand still far outweighs supply, some are watching the dip in closed transactions closely. RE/MAX Destiny Broker/Owner Jim Burton, based in Cambridge, MA, told Boston Agent Magazine, “As the summer progresses, we need to watch inventory levels. If inventory climbs and does not get absorbed, the market could shift.”
Regardless of what’s happening in the industry, Bailey notes, people tend to buy or sell homes when they want or need to.
“Home is a uniquely personal thing,” he says. “People move mostly because the time is right for them to do so.”
Here’s the need-to-know data from the June 2022 RE/MAX National Housing Report:
The Number of Home Listings Continues to Rise
Of the 53 metro areas surveyed in June 2022, the number of newly listed homes is up 7.7% compared to May 2022, and up 1.6% compared to June 2021. Leading the year-over-year new listings percentage increase were Phoenix, AZ at +34.1%, Nashville, TN at +22.8%, and Philadelphia, PA at +21.8%. The markets with the biggest decrease in year-over-year new listings percentage were Kansas City, MO at -18.5%, Honolulu, HI at -15.9%, and Hartford, CT at -15.6%.
Homes Are Still Selling Above Listing Price
The average Close-to-List Price Ratio in June was 102%, meaning that homes, in general, sold for 2% more than the asking price. That dropped from 103% in May and matched June 2021. The Close-to-List Price Ratio is calculated by the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price. If it’s less than 100%, the home sold for less than the list price. The metro areas with the lowest Close-to-List Price Ratio were Coeur d’Alene, ID and Miami, FL, which tied at 97%, followed by Bozeman, MT and New Orleans, LA, which tied at 99%. The highest Close-to-List Price Ratios were in San Francisco, CA at 109%, and Burlington, VT at 107%, followed by a five-way tie between Boston, MA, Richmond, VA, Manchester, NH, Hartford, CT, and Trenton, NJ at 105%.
There Still Aren’t Enough Homes to Meet Demand
While inventory grew for a third consecutive month (by a whopping 34.1% over May and 27.5% year over year), Months’ Supply of Inventory still sat relatively low at 1.4 months in June 2022. The markets with the lowest Months’ Supply of Inventory were Charlotte, NC and Manchester, NH, tied at 0.4, followed by Albuquerque, NM at 0.5.