Home Sales Down 18.7% Year-Over-Year, Hampered by Lagging Inventory

The latest RE/MAX National Housing Report for May 2023 revealed a seasonal, 20% increase in home sales over April, as well as an 8.7% uptick in new listings.

While sales are still down 18.7% from last May, solid demand amid tight inventory helped push the median sales price up by 3.2%, month over month, to $423,000.

Ahead of the peak home sales months of June and July, the report shows a slight increase of 0.4% in inventory month over month, with housing supply up by 9.7% compared to May 2022.

"The sizeable jump in May homes sales signals the start of the peak selling season, but lack of inventory remains the biggest challenge for home buyers," said Nick Bailey, RE/MAX President and CEO. "With the vast majority of homeowners having a mortgage rate under 5%–and a good chunk of those are under 3.5%–we're not seeing as much move-up activity as usual. That means fewer available listings for buyers to choose from – and most likely some continuing bumpiness in the market. That said, sales are still happening, and experienced agents are still finding solutions for their buyers and sellers."

Seattle, Washington had the largest decline in transactions year-over-year. According to John Manning, managing broker of RE/MAX Gateway in Seattle, with the low interest rates many current homeowners have, they are in no rush to sell.

"The Seattle housing market remains defined by healthy demand and ultra-low supply," said Manning. "The local economy is extremely strong and well-represented in all the top industry sectors from fishing to medical to technology. While home prices have been pressured by higher mortgage interest rates, homeowners still see their homes as an excellent long-term investment. Additionally, almost all homeowners who purchased before 2022 benefit from historically low interest rates. Combining strong long-term outlook with low-interest mortgages, Seattle homeowners have little incentive to sell their homes."

Other notable metrics:

• May's median sales price was the highest since June 2022, coming in at $3,000 less than that month's figure of $426,000.
• New listings saw a nearly 10% gain over April but were still down 20.4% compared to May 2022 levels.
• Months' Supply of Inventory in May was 1.2, down from 1.3 in April but above the 1.1 recorded a year ago.
• The average close-to-list price ratio for May was 100%, indicating that homes sold for the asking price on average. This is an increase from April's 99% ratio and a decrease from the 103% ratio recorded a year ago.
• Homes sold in May were on the market for an average of 31 days, which is three days less than April but 10 days longer than the same period last year.

Highlights and local market metrics for May include:

Of the 51 metro areas surveyed in May 2023, the number of newly listed homes is up 8.7% compared to April 2023, and down 20.4% compared to May 2022.

Leading the year-over-year new listings percentage increase were:

1. Kansas City, MO at +5.2%
2. Fayetteville, AR at +4.5%
3. Des Moines, IA at +0.1%

The markets with the biggest decrease in year-over-year new listings percentage were:

1. Phoenix at -40.4%
2. Las Vegas at -35.8%
3. Seattle at -35.4%

New Listings 
Of the 51 metro areas surveyed in May 2023, the number of newly listed homes is up 8.7% compared to April 2023, and down 20.4% compared to May 2022.

The markets with the biggest decrease in year-over-year new listings percentage were:

1. Phoenix at -40.4%
2. Las Vegas at -35.8%
3. Seattle at -35.4%

Leading the year-over-year new listings percentage increase were:

1. Kansas City, MO at +5.2%
2. Fayetteville, AR at +4.5%
3. Des Moines, IA at +0.1%

Closed Transactions 
Of the 51 metro areas surveyed in May 2023, the overall number of home sales is up 20.0% compared to April 2023, and down 18.7% compared to May 2022. The markets with the biggest decrease in year-over-year sales percentage were Seattle at -33.9%, Anchorage, AK at -32.5%, and Portland, OR at -31.8%. Two metro areas had a year-over-year sales percentage increase in May, Bozeman, MT, and Fayetteville, AR both at +3.1%.

Median Sales Price – Median of 51 metro area prices
In May 2023, the median of all 51 metro area sales prices was $423,000, up 3.2% compared to April 2023, and down 1.9% from May 2022. The markets with the biggest year-over-year decrease in median sales price were San Francisco at -10.7%, Las Vegas at -10.0%, and Phoenix at -8.9%. The markets with the biggest year-over-year increase in median sales price were Hartford, CT at +11.0%, Milwaukee, WI at +10.1%, and Trenton, NJ at +8.9%.

Close-to-List Price Ratio – Average of 51 metro area prices
In May 2023, the average close-to-list price ratio of all 51 metro areas in the report was 100%, up compared to 99% in April 2023, and down from 103% compared to May 2022. The close-to-list price ratio is calculated by the average value of the sales price divided by the list price for each transaction. When the number is above 100%, the home closed for more than the list price.

If it's less than 100%, the home sold for less than the list price. The metro areas with the lowest close-to-list price ratio were Miami at 95%, followed by a tie between Coeur d'Alene, ID and New Orleans at 97%. The highest close-to-list price ratios were Hartford, CT at 105%, followed by a three-way tie between Burlington, VT, Manchester, NH, and San Francisco at 104%.

Days on Market – Average of 51 metro areas

The average days on market for homes sold in May 2023 was 31, down three days from the average in April 2023, and up 10 days from the average in May 2022. The metro areas with the lowest days on market were a tie between Manchester, NH and Washington, DC at 11, followed by another tie between Baltimore, MD and Trenton, NJ at 12.

The highest days on market averages were in Fayetteville, AR at 77, Miami at 51, and Phoenix at 50. Days on market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

Months' Supply of Inventory – Average of 51 metro areas
The number of homes for sale in May 2023 was up 0.4% from April 2023 and up 9.7% from May 2022. Based on the rate of home sales in May 2023, the months' supply of inventory was 1.2, down from 1.3 in April 2023, and increased from 1.1 in May 2022.

In May 2023, the markets with the lowest months' supply of inventory were Manchester, NH at 0.5, followed by a seven-way tie between Albuquerque, NM, Baltimore, MD, Charlotte, NC, Hartford, CT, Milwaukee, WI, Seattle, WA, and Washington, DC at 0.6. The markets with the highest months' supply of inventory were Coeur d'Alene, ID at 2.7, New Orleans, LA at 2.5, followed by a two-way tie between Bozeman, MT and Miami, FL at 2.4.

To read the full report, including more data, charts, and methodology, click here.