Supply Grows as Demand Continues to Rise

RE/MAX has released its National Housing Report for July 2021, which found that despite continued high demand, July inventory climbed 4.0% from June 2021, marking the first two consecutive months of month-over-month inventory gains since April and May 2019. At the same time, July's 1.3 “Months of Inventory” set a new report low for the month.

"The month-over-month gain in inventory, extending a short trend that started in June, was great news–even though the shortage of listings remains a major challenge," said Nick Bailey, President of RE/MAX LLC. "Some buyers have stepped away in light of high prices, seller expectations, multiple offers and intense competition, but new listings are still selling quickly. Clearly, the demand is still there. The market should continue to run hot, especially if interest rates remain low, prices stabilize a bit, and more sellers jump in to take advantage."

With year-over-year comparisons skewed by the pandemic, RE/MAX examined June-to-July averages for 2015-2019 to illustrate typical mid-summer findings:

• The month-over-month decline of 1.2% in July's Median Sales Price was less than the 2015-2019 average June-to-July drop of 2.2%. Year over year, the Median Sales Price is up 16.2%.
• The 4.0% increase in month-over-month inventory was atypical for this time of year–and a far cry from the 2015-2019 average June-to-July decline of 1.6%. Although this marked the second consecutive month of gain (June inventory grew 1.9% from May), inventory remains down 29.7% year-over-year.
• The third largest total in the 13-year history of the report, July 2021 home sales dropped 8.4%–nearly identical to the 2015-2019 average decline of 8.2%. Year-over-year, sales were down 3.1%. The only months with more sales than July 2021 were June 2021 and July 2020.

"In the past 13 months, we've seen the top three months of sales activity in 13 years of doing this report,” said Bailey. “That says a lot about today's buyers. Given all the factors favoring sellers right now, it's the buyers who are driving this very active market."

In terms of inventory, the Report found that the number of homes for sale in July 2021 was up 4.0% month-over-month in July 2021, and down 29.7% from July 2020. Based on the rate of home sales in July 2021, the Months’ Supply of Inventory was flat at 1.3 compared to June 2021, and decreased compared to 2.0 in July 2020. A six months’ supply indicates a market balanced equally between buyers and sellers. In July 2021, of the 53 metro areas surveyed, zero metro areas reported a months’ supply at or over six, which is typically considered a buyer's market. Areas experiencing the greatest year-over-year drop in inventory were as follows:

• Indianapolis, Indiana at -86.6%
• Albuquerque, New Mexico at -70.6%
• Hartford, Connecticut at -68.0%
• Providence, Rhode Island at -62.1%
• Raleigh-Durham, North Carolina at -60.0%

Of the 53 metro areas surveyed in July 2021, the overall average number of home sales was down 8.4% compared to June 2021, and down 3.1% compared to July 2020. Leading the year-over-year sales percentage decrease were:

• Salt Lake City, Utah at -22.5%
• Dallas/Fort Worth, Texas at -20.8%
• Boise, Idaho at -20.3%
• Detroit, Michigan at -19.6%
• Pittsburgh, Pennsylvania at -17.6%

In July, the median of all 53 metro Median Sales Prices was $331,000, down 1.2% compared to June 2021, and up 16.2% year-over-year. No metro areas saw a year-over-year decrease in Median Sales Price. Forty-five metro areas increased year-over-year by double-digit percentages, led by the following:

• Boise, Idaho at +35.7%
• Phoenix, Arizona at +28.2%
• Augusta, Maine at +24.0%
• Salt Lake City, Utah at +23.7%
• Burlington, Vermont at 23.0%

RE/MAX found that the average number of days on the market (defined as the number of days between when a home is first listed in an MLS and a sales contract is signed) for homes sold in July 2021 was 23, down one day from the average in June 2021, and down 21 days from the average in July 2020. The metro areas with the lowest Days on Market were Cincinnati, Ohio at none days; Nashville, Tennessee at 10 days; and Omaha, Nebraska at 11 days. The markets showing the highest number of Days on the Market were found in Miami, Florida with 76 days; Des Moines, Iowa at 75 days; and New York, New York at 63 days.