HousingWire
Mike Simonsen of Altos Research on data showing growth in home sales to close out the year
By Mike Simonsen
If you follow real estate data closely, you’ll know that inventory rose late into November. You also know that new listings are up over last year, too.
However, what you might not know is that home sales are climbing, which is a good sign.
Here are some key data takeaways below for the week ending Nov. 27.
Inventory (finally) peaks for the year
Housing inventory was down by 0.7% from last week. Inventory hit 566,000 homes on the market, meaning there are 0.5% more homes for sale now than last year at this time.
New listings volume is up, too. There were 58,000 new listings this week, with 10,000 of those homes already under contract as immediate sales. A few more sellers appear to be braving the market each week.
Pending sales make a surprising jump
Here’s the surprising data point that stands out: Each week, we’re seeing more new contracts started than last year at this time. We had 52,000 new pending sales this week. That’s 5% more sales initiated than this time a year ago.
There are still fewer total contracts pending now versus last year (296,000 versus 304,000 in 2022), so the headlines will still report low sales for several months.
All year long, we’ve had 20% to 40% fewer sales each week, but now the rate is expansionary with 5% more sales this week than the same week a year ago. However, if mortgage rates were to jump again, we could see sales slip, so it’s a delicate balance.
Sales may be down, but home prices had a softer landing in 2023
Overall, home sales cratered in 2023, but home prices are up 1% to 3% over 2022 – a trend that looks to continue. The median price of single-family homes in the United States is $425,000.
There’s nothing bullish on the horizon for home prices in 2024. We are likely to see some declines there given economic risks and gently rising home inventory.
A true data geek, Mike founded Altos Research in 2006 to bring previously unavailable insights on the US housing market to those who need it. The company now serves the largest Wall Street investment firms, banks, and tens of thousands of real estate professionals around the country. During the pandemic, Mike used Altos Research data to identify trends in the real estate market well before the headlines, and his work was recently featured in the New York Times, The Atlantic and other publications. Mike was also the 2020 president of the San Francisco Chapter of the Entrepreneurs’ Organization, a group in which he gets to lead and learn from hundreds of the most exciting entrepreneurs in the world.