Real Estate Listings Hit All-Time Low, Driving Home Sale Prices to New High
Redfin real estate data shows that active home listings hit an all-time low in November, sending sales prices to a new high.
Redfin real estate data shows that active home listings hit an all-time low in November, sending sales prices to a new high.
Finding an affordable home is getting more difficult as supply and demand in the housing market grows further out of balance.
Active home listings fell to an all-time low of around 538,000 at the end of November, down 26% from the roughly 725,000 active at this time last year, according to data from Redfin, a national real estate brokerage.
In accordance with basic supply and demand principles, the severe lack of inventory drove up sales prices. The average sales price in November climbed to a record $360,375. That’s up from $316,000 at this time last year and $359,637 in July 2021, when home prices were presumed to have peaked for the year.
Record low home listings is the result of a combination of factors. They include:
Together, these conditions create the perfect storm of home supply shortage, and inventory may fall further yet.
Redfin Chief Economist Daryl Fairweather said active listings typically decline 15% in December. If that comes to fruition, there would be 100,000 fewer homes for sale at the end of 2021 than when supply previously bottomed out in February.
Related Reading: What Will Homebuying Be Like in 2022? Here’s What New Forecasts Say
That puts sellers squarely in the driver seat heading into 2022. Redfin data shows that 43% of homes sold above list price in November and the average home sold for 0.5% above asking.
The omicron variant of the coronavirus also threatens to hamper housing supply and increase homebuyer competition, although it’s not clear how much of an impact it will have. Previous COVID waves have been met with low mortgage rates, high demand, and fewer sellers willing to list their homes.
That leaves homebuyers in the precarious position of deciding whether to brave the current market or roll the dice on future conditions. But even in an extremely seller-friendly market, homeownership can be used as a hedge against inflation and a primary means of wealth creation.