The cold snap that swept the central United States in February caused listings to plunge in tandem with the thermometer.
Realtor.com’s latest report suggests that housing inventory in the country’s 50 largest metropolitan areas declined by 48.6 percent compared to the same month last year, equating to 496,000 fewer properties on the market. New listings were down 24.5 percent year-over-year, squeezing an already tight supply situation out of 207,000 homes.
Markets that saw the sharpest drop in new listings included Oklahoma City, OK (-46.6 percent), Kansas City, MO (-45.3 percent) and Milwaukee, WI (-39.8 percent) — all Midwestern cities that saw temperatures dive into the single and negative digits during the third week of February. Two of the three markets with increases in new listings were located in California, which was spared from the arctic blast.
“In today’s inventory-starved market, any setback is significant,” said realtor.com Chief Economist Danielle Hale.
“Unless we see some big improvements in the new listings trends over the coming months buyers can expect stiff competition. And unlike last spring, buyers may also face affordability challenges as home prices and mortgage rates increase. Market dynamics continue to favor sellers,” she added.
Dwindling supply has caused prices to soar as buyers looking to take advantage of favorable interest rates compete over a limited number of for-sale properties. The median listing price of a single-family home surged 13.7 percent in February to $353,000, surpassing last year’s record-high well before the historically busy spring homebuying season had even begun.
Listing price gains were recorded in all regions of the country, led by the Northeast at 16.8 percent, followed by the West at 11.7 percent, the Midwest at 10.9 percent and the South at 9.5 percent. The top-performing markets for median listing price growth included Austin, TX (+37.2 percent), Rochester, NY (+27.6 percent) and Buffalo, NY (+25.0 percent).
The typical home spent 70 days on the market (DOM), selling 11 days faster than the same period last year. In the 50 largest US metros, homes sold in an average of 48 days, shaving 12 days off February 2020’s total. DOM averages plummeted in cities like Austin, TX (-36 days), Charlotte, NC (-28 days) and Portland, OR (-27 days) compared to the previous year.
February’s dearth of new listings could put a chill on the spring housing market. According to the report, new listings would have to increase by 25 percent year-over-year in March and April for inventory to get on par with April 2020 levels — a scenario that’s unlikely to play out. If these trends continue, many potential buyers could soon be sidelined.