Homes are still flying off the market at a historic pace, but according to Redfin, a growing percentage of properties are going “stale” as the market continues to temper.
The share of homes listed for at least 30 days without going under contract grew by 12.5% year over year in July. Some 61.2% of for-sale homes stayed on the market for 30 days or longer, up from 54.4% in July 2021.
It’s the first time since the beginning of the COVID-19 pandemic that “stale” housing supply has increased on an annual basis, with Redfin defining “stale” homes as those on market for at least 30 days without going under contract and still actively listed on the final day of the month. It’s also the second-largest annualized jump since Redfin began tracking the metric in 2012, eclipsed only by the 13.9% yearly leap seen in April 2020 when the pandemic brought housing activity to a standstill.
Stale housing supply is seeing an increase as buyers have pulled back amidst the combination of a still-rising rate environment and high home prices. While it means buyers are gaining a bit more leverage, the shift is beginning to frustrate some sellers, Redfin reported.
“People want to know whether we’ve officially shifted from a seller’s market to a buyer’s market. While there’s not a clear line separating those two ideas, homes sitting on the market longer is a point in buyers’ favor,” said Taylor Marr, Redfin’s deputy chief economist. “Buyers can take their time making careful decisions about homes without worrying so much about bidding wars, offering over the asking price and waiving contingencies.
“It’s a different story for sellers, who have spent the last two years hearing about their neighbors’ homes getting multiple offers the day they go on sale. Now they need to price lower and get back to the basics of selling a home, like staging and sprucing up painting, to get buyers’ attention.”
Among the country’s largest metro areas, Oakland has seen stale inventory grow the most, with the share of homes on the market for at least 30 days up 60.7% annually. Also high on the list were Phoenix (54.5% year-over-year increase in stale inventory); Austin (50.9%); Anaheim, California (49.7%); and Riverside, California (46.7%).
Notably, the nationwide uptick in stale inventory has been key in assuaging the supply shortage. The number of new listings in July was actually down 6%, per Redfin, but the total number of homes for sale was up 4% — the largest gain since the middle of 2019.
Just as notable, however, is Redfin’s prediction that the big yearly jump in stale inventory is likely to regress soon. Part of the uptick is a reflection of last year’s scorching housing market. The typical home sold in 15 days in July 2021, close to the shortest on-market time ever recorded.