Inventory Woes Aren’t Slowing Down Home Sales

Inventory Woes Aren’t Slowing Down Home Sales
Existing-home sales fared strongly in October even as buyers continued to complain there aren’t enough homes on the market. Existing-home sales, which are completed transactions for single-family homes, townhomes, condos, and co-ops, increased by 0.8% in October compared to September, the National Association of REALTORS® reported Monday. Compared to a year ago, however, sales are down 5.8%.
 
Meanwhile, the inventory of unsold homes fell by 12% in October compared to last year. A limited supply of homes for sale remains an ongoing issue for the housing market against continued strong demand among potential home buyers.
 
“Home sales remain resilient, despite low inventory and increasing affordability challenges,” says Lawrence Yun, NAR’s chief economist. “Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Mortgage rates remain low, although rates are rising. The 30-year fixed-rate mortgage averaged 3.07% in October, up from 2.9% in September, according to Freddie Mac.
 
Here’s a closer look at key housing indicators from NAR’s latest housing report:
 
  • Home prices: The median existing-home sales price rose 13.1% year over year to $353,900. Prices climbed in all four major regions of the U.S.
  • Housing inventories: Total housing inventory at the end of October was 1.25 million units, down 0.8% compared to September. Unsold inventory sits at a 2.4-month supply at the current sales pace.
  • Days on the market: Eighty-two percent of homes sold in October were on the market for less than a month. Properties typically remained on the market for 18 days in October, down from 21 days a year ago.
  • First-time buyers: First-time buyers comprised 29% of sales in October, down from 32% a year ago.
  • Investors and second-home buyers: Individual investors or second-home buyers comprised 17% of sales in October, up from 13% in September and from 14% in October 2020, NAR reports. Investors and second-home buyers tend to make up the biggest bulk of all-cash sales, which accounted for 24% of transactions in October.
  • Distressed sales: Foreclosures and short sales accounted for less than 1% of sales in October, equal to October 2020.

A Regional Look at Home Sales

Two of the four major regions of the U.S. posted month-over-month increases in existing-home sales last month. Still, home sales remain strong in most parts of the country even as housing inventories remain low.
 
“Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country,” Yun says.
 
“Record-high stock markets and all-time-high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”
Here’s how existing-home sales fared across the country in October:
 
  • Northeast: Sales dropped 2.6% in October, reaching an annual rate of 750,000. That marks a 13.8% decline compared to October 2020. Median price: $379,100, up 6.4% from one year ago.
  • Midwest: Sales increased 4.2% to an annual rate of 1.5 million in October, a 6.3% decrease compared to a year ago. Median price: $259,800, up 7.8% from October 2020.
  • South: Sales rose 0.4% in October, posting an annual rate of 2.78 million, a 3.5% decrease compared to last year. Median price: $315,500, a 16.1% increase from a year ago.
  • West: Sales remained stable in October compared to September, staying at an annual rate of 1.31 million. That is down 5.1% from one year ago. Median price: $507,200, up 7.7% from October 2020.
Locally, in Santa Barbara, we have a similar picture, but with numbers that are even more pronounced.
 
2020 vs. 2021. The chart below compares statistics Year to Date (YTD) November 2020 versus 2021, reporting for homes and estates, and planned unit developments (PUDs) sold in Montecito, Hope Ranch, Carpinteria, Summerland, East/West of State Street (Downtown Santa Barbara) and Goleta North/South is as follows:
 
 
Call me or text me for a confidential, no-obligation consultation. For text inquiries, please use the keywords, “real estate inquiry.”
 
I look forward to hearing from you.

Recent Blog Posts

The Truth About Down Payments

February 26, 2024

If you’re planning to buy your first home, saving up for all the costs involved can feel daunting, especially when it comes to the down payment. That might be because … Read more

Lock in the House Price not the payment

February 23, 2024

With interest rates on the rise, potential home buyers are wondering if this is a good time to buy.

Expert Home Price Forecasts for 2024 Revised Up

February 22, 2024

Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will… Read more

Some Experts Say Mortgage Rates May Fall Below 6% Later This Year

February 21, 2024

There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared… Read more

Strategic Tips for Buying Your First Home

February 20, 2024

Buying your first home is a big, exciting step and a major milestone that has the power to improve your life. As a first-time homebuyer, it's a dream you can make come… Read more

It’s Time To Prepare Your House for a Spring Listing

February 20, 2024

If you're thinking of selling your house this spring, now is the perfect time to start getting it ready. With the market gearing up for its busiest time of year, it'll… Read more

Achieve Your Dream of Homeownership with Condos and Townhomes [INFOGRAPHIC]

February 16, 2024

If you're trying to buy a home but are having a hard time finding something in your budget, consider condos and townhomes.

Don’t Let the Latest Home Price Headlines Confuse You

February 15, 2024

Based on what you’re hearing in the news about home prices, you may be worried they’re falling. But here’s the thing. The headlines aren’t giving you the full picture.… Read more

Why So Many People Fall in Love with Homeownership

February 14, 2024

Your house should be a space that’s uniquely you. And, if you’re a renter, that can be hard to achieve. When you rent, the paint colors are usually the standard shade … Read more

Work

Lori’s reputation for exceptional service, discretion, and uncompromising integrity is at the heart of every transaction. With experience cultivated from almost 20 years of real estate transactions, both as an agent and investor, Lori brings her passion, market knowledge, and unmatched work ethic to each transaction.