Inventory Troubles Continue to Plague Market

New listing levels dropped to the third lowest level on record in May.

Redfin reports that the number of homes for sale is the lowest it has been in more than a decade. Just 1.4 million homes were on the market in May, a 7.1% drop from 2022. However, home prices have dipped slightly, down 3.1% year over year, but up 2.8% from April, as consumers continue to grapple with higher mortgage rates. The report found that the median national sales price in May was $419,103, which is below the record high of May 2022’s $432,311. Pennsylvania’s median sales price in May was $219,811.

Homes are also selling closer to what they are listing for; the average sale-to-list ratio was 100% in May, compared to 103.1% in May 2022. However, prior to May, there were nine consecutive months of sale-to-list ratios falling below 100%. Despite a slower market, 37.5% of homes sold above their listing price, meaning multiple offers are not out of the picture, just not as prevalent as they had been. About 47% of agents who responded reported multiple offers in a transaction, a decrease from 56.1% year over year and down significantly from a record high of nearly 70% in January 2022.

Homes are also lasting on the market longer, but still selling faster than pre-pandemic days. On average, homes stayed on the market for 31 days, compared to 17 days a year earlier. However, in 2019, homes were spending about 60 days on the market. Still, housing inventory remains well below pre-pandemic levels. In May 2019, there were 2.2 million homes on the market.

In Pennsylvania, inventory followed suit with the national trend. Housing inventory was down 23% year over year.