Inman News
Robust new construction activity and subdued homebuyer demand has led to an inventory boom in 22 of the 50 largest markets, with some metros seeing active inventory double vs 2019
Nearly half of the nation’s largest 50 metros are in the midst of an inventory boom, with the South and West Coast leading the way in markets where inventory levels are up to 100 percent higher than pre-pandemic trends, according to Realtor.com’s latest market report.
Denver (+100 percent), Austin (+69 percent), Seattle (+60.9 percent), Dallas-Fort Worth (+ 55.5 percent) and San Antonio (+58.3 percent) logged the greatest gains. Realtor.com attributed these gains to two primary factors — robust building activity during and post-pandemic, and a slowdown in homebuyer activity, which has allowed active inventory levels to reach new heights.
“For-sale housing inventory in Denver has doubled compared with the pre-pandemic norm, providing a clear sign of a housing market realignment,” Realtor.com Chief Economist Danielle Hale said in a written statement. “In some areas, affordability concerns have also slowed buyer demand, giving the market room to breathe and contributing to gains in homes for sale. In general, we’re seeing strong inventory rebounds in metros that have built more in the [past] six years.”
Realtor.com said there’s a strong correlation between a metro’s 2019 to 2025 new construction rates and the growth in active listings. Metros that have built more than the national average of seven housing units per 100 residents over the past six years have experienced stronger inventory recoveries compared to those that have not, the report said.
Pandemic boomtowns like Austin, Nashville, and Denver are the clearest examples of this correlation, Realtor.com said, with their current inventory levels matching or exceeding pre-pandemic trends. Meanwhile, metros like New York, Boston, Baltimore and Buffalo, which have built less than seven housing units per 100 residents over the past six years, are still struggling to see meaningful inventory increases.
Realtor.com said there are a few outliers in the trend. Despite lagging in new construction starts and completions, San Francisco has more active listings than pre-pandemic trends. Meanwhile, Richmond, Virginia, still has a dearth of listings, despite robust building trends. Affordability seems to be the leading factor in these outliers, the report said, with homebuyers flocking to metros with the best deals, even if listing availability is slim.
Although inventory levels are the best they’ve been in years for many markets, Hale said that doesn’t mean we’re in a buyers’ market.
In May, the market had 4.6 months of supply at the current sales pace — two months away from the six-month threshold for a buyers’ market. Still, homebuyers have greater negotiating power this spring and summer, as days on market in many metros have increased by double digits.
“This milestone underscores both the importance of enabling housing construction and the growing divide in housing conditions across regions, where some markets are rapidly normalizing and others remain stuck in low-supply dynamics,” she said.