Mixed Messages in the Market
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Compared to last year, new listings are up and existing home sales are down – a tale of two metrics – but with a promising silver lining.
Why it matters: New listing volumes are a leading indicator for existing home sales, which typically lag by two to three months, meaning the current surge in new listings is a hopeful sign for the remainder of the year.
Data points: Compass has 35 percent more listings than the same time last year – a trend which has been steadily increasing since January – with about the same number of agents.
Nationally, new listings are up about 15 percent compared to last year, according to Redfin data (which measures all listings in a market, not just Redfin’s listings).
New listings aren’t quite at the levels of 2021 and 2022, but are well off the lows of 2023, meaning inventory is building.
But new listings are not yet translating into sales, which is reported monthly by the National Association of Realtors.
After a relatively steady start to the year, existing home sales in March were down 10 percent compared to 2023, and down 19 percent compared to the historical average.
For the first quarter of 2024, existing home sales were down 17 percent compared to the pre-pandemic historical average (2012–2019).
At this rate, total transactions for 2024 would end up at 4.3 million, up 6 percent from last year.
What to watch: I think it has something to do with interest rates.
But also keep an eye on days on market to make sure inventory isn’t just sitting on the market (sellers without buyers).
The bottom line: It’s a confusing time with mixed messages coming from the market, making it easy to spin whatever narrative you want (armageddon vs. a healthy recovery).
There’s no simple answer to what’s going on, just data: new listings are up significantly and sales are lagging.
2024 will likely be another depressed year of activity, but the best leading indicator of future activity, new listings, is looking promising.
