Although homes are still moving off the market faster than they were before the COVID-19 pandemic, they are now hanging around on the market much longer than they did last year — suggesting that the pressure is back on sellers to draw in buyers as demand continues to cool, according to Zillow.
Per data from the online real estate marketplace, the age of inventory (the median number of days that homes currently listed for sale have been on the market) is still 30% below the pre-pandemic norm. But since plummeting to 19 days, an all-time low, in April 2022, the median age of inventory for homes listed on Zillow has grown at the fastest pace since at least 2018, when Zillow’s analysis started.
With the number of active buyers dwindling due to affordability challenges and rising interest rates, homes listed for sale have remained on the market for a median of 54 days as of mid-October. That’s up 45% from the same time last year. If age of inventory continues to grow at its current rate (and Zillow noted that the winter months are usually the slowest time of year for the housing market), this metric is set to end the year at 68 days, roughly a month shorter than prior to the pandemic. For context, at the end of both 2018 and 2019, for-sale homes remained on the market for about 100 days.
“The rapid increase in the age of inventory is primarily because the dip in buyer demand has been deeper than the drop in new listings. … Homeowners are reluctant to sell and give up what is likely a mortgage rate of around 3% in order to buy a new home at today’s interest rates,” Zillow’s study said. “The lack of new inventory hitting the market means the share of inventory taken up by listings a week old or less is down 42% from a year ago.”
The amount of time between a listing hitting the market and an offer being accepted also has grown by leaps and bounds as the market has softened. Homes that became pending sales in September did so after 19 days. That’s still 10 days faster than in September 2019, prior to the pandemic, but nowhere near the lightning-fast turnarounds recorded during much of the health crisis, when sellers were often accepting offers after their homes spent only a week on the market.
“Last year, sellers could seemingly list their home at any price and see multiple offers roll in above list price within days,” said Nicole Bachaud, Zillow senior economist. “Now buyers have some negotiating power and sellers are under pressure.
“Buyers are still out there and willing to buy when they find the right home at the right price, which will provide a floor for the price declines we are currently seeing. But sellers need to do things right to attract the attention of these buyers — pricing their home competitively and making their listing attractive to online home shoppers.”