Sellers Listing Their Homes … But Buyers Aren’t Biting MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

Home sellers are returning to the market, but buyers are hesitant, according to a recent Zillow market report. In May, new property listings exceeded sales, allowing buyer competition and price rise to slow and more price relief is expected.

“Rate lock’s hold seems to be loosening homeowners who may have put off listing their homes are done waiting. But just as more choices sprang up for sale, buyers turned on cruise control,” said Orphe Divounguy, Zillow Senior Economist. “Inflation has hit younger households hardest, and stubbornly high rates have pushed a mortgage out of reach for many first-time buyers. That has cooled competition for houses. If these trends hold, we’re likely to see price growth flatten or tick down over the next year.”

May 2024 Market Report Highlights

Home values climbed month over month in all fifty of the nation’s largest metro areas in May. Gains were biggest in Buffalo (two point one percent), Pittsburgh (one point nine percent), Cleveland (one point eight percent), San Jose (one point eight percent), and Hartford (one point seven percent).
The smallest monthly appreciation was in Austin (point two percent), Tampa (point three percent), San Antonio (point three percent), Orlando (point three percent), and New Orleans (point four percent).
Home values are up from year-ago levels in forty six of the fifty largest metro areas. Annual price gains are highest in San Jose (twelve point seven percent), Hartford (eleven point six percent), San Diego (eleven point one percent), Los Angeles (eight point nine percent), and Boston (eight point three percent).
Home values are down from year-ago levels in three major metro areas. The largest drops were in New Orleans (negative five point nine percent), Austin (negative four point one percent), and San Antonio (negative two point two percent ).
The typical mortgage payment is up eleven point three percent from last year and has increased by one hundred and fifteen point three percent since pre-pandemic.

Inventory, New Listings and Pending Sales Overview

New listings increased by seven point nine percent month over month in May.
There were twelve point six percent more new listings compared to last year.
New listings are still twenty three point three percent lower than pre-pandemic levels.
Inventory (the number of listings active at any time during the month) in May increased by seven point four percent from last month.
There were twenty two point one percent more listings active in May compared to last year.
Inventory levels are thirty three point eight percent lower than pre-pandemic levels for the month the smallest deficit in more than three years.
Newly pending sales held steady in May from the prior month.
Newly pending sales decreased by four point two percent from last year.
Median days to pending, the typical time from initial list date to pending status for homes that went under contract during a month, is at thirteen days in May, which is unchanged from April.
Median days to pending increased by three days from last year.

Buyers and Sellers Butt Heads as Inventory Jumps

Sellers’ new listings increased by eight percent from April to May, and are now thirteen percent higher than last year’s record low. The effects of “rate lock” when homeowners keep their existing homes and low-interest mortgages are diminishing over time. According to a Zillow study of recent sellers, the vast majority (about eighty percent) were inspired by life events such as marriage or having a child, rather than perfect financial conditions.

However, buyers aren’t matching sellers’ enthusiasm; sales in May were six percent lower than last year. This helped to refill the housing inventory, with the number of homes on the market increasing twenty two percent from last year’s near-record low level. Inventory is still thirty four percent below pre-pandemic levels, but this is the smallest gap in almost three years.

New listings increased the most annually in the West Coast and coastal South, particularly in San Diego, Seattle, Charlotte, Raleigh, and the San Francisco Bay Area. Total inventory increased the greatest in big Florida areas, where strong new building has helped replenish the coffers. Buyers observed more listings month after month in all major markets except Miami.

Housing Competition and Price Appreciation Continue to Ease

As a result, buyer competition decreased in May, and home price appreciation slowed. Typical home value growth decreased from four point four percent year-over-year in April to three point nine percent in May, which remains a robust, normal rate, while monthly appreciation fell from one point two percent in April to point eight percent in May. Home values have risen dramatically more than forty five percent since before the outbreak.

Year-over-year, prices have declined in New Orleans, Austin, and San Antonio, while the Northeast and coastal California have seen the most gain. Renters who are trying to save for a down payment may see some relief in the coming year. Zillow predicts that property values will rise point four percent in 2024 before falling one point four percent through May 2025.

So, what does this means for buyers and sellers?

According to Zillow’s market heat index, the country is becoming more friendly to buyers and is heading toward “neutral” zone, but sellers continue to have a modest advantage. The top sellers’ markets among the fifty major metro areas are Buffalo, Hartford, and San Jose. New Orleans, Miami, Jacksonville, and Memphis are all geared toward buyers, providing those in the market an advantage in negotiations.

In May, nearly one-quarter of all properties for sale in the country had their prices reduced, the greatest percentage in the previous six years for this time of year. There’s a significant probability that purchasers might get a lingering property for less than the asking price. This situation makes experienced agents even more important to both buyers and sellers, as they can identify and negotiate deals for buyers while accurately pricing and marketing properties for sellers.

To read the full report, including more data, charts, and methodology, click here.