Lately, there have been many stories suggesting that there are a lot more houses for sale, prices are dropping drastically, and home values are declining. However, these headlines can be quite misleading. Let’s dive into the details to get a clearer picture of what’s actually happening in the housing market.
It’s true that active inventory has risen by 6.7% in June and is up 37% from last year. But these increases are from very low numbers to begin with. A significant part of this increase comes from just two states – Florida and Texas. So, what about the rest of the country?
Northeast: In this region, the number of houses for sale is still 57% below pre-pandemic levels.
Midwest: Inventory is 49% below pre-pandemic levels.
This means that, outside of Florida and Texas, inventory remains tight in many parts of the country.
The media has been reporting that home prices are down in the South and are only moderating everywhere else. These reports can be quite misleading because they often talk about the median price, which can be skewed by the mix of sales – meaning that a larger amount of smaller, lower-priced homes selling can bring down the median price.
If you look at the median price per square foot instead, this measure accounts for the differences in home sizes and types and shows that home prices are actually rising significantly.
So, the next time you see a headline about the housing market, remember that the details matter. Inventory and prices can vary widely depending on the region and the metrics used. Understanding these nuances can help you make better-informed decisions whether you’re buying, selling, or just keeping an eye on the market.
