Housing prices skyrocketed during the pandemic. The median price of a home sold in the US went from just over $300,000 to nearly $500,000. With low interest rates, the housing market was doing very well even at higher prices. Now we are beginning to see higher interest rates take a toll on home prices across the country. Median home prices are down 13% from their peak in the fourth quarter of 2022.
An additional reason for the low inventory - the accuracy of the MLS database has increased due to technology. Inventory starts when a house is listed and removed when sold. Years ago, the removal was inconsistent and long delayed. With technological improvements, house sales are reported much quicker than in the past, hence lowering average inventory for any given period of time.
Great thoughts as always, Daniel. Excellent reminder for me that buying a home is a “needs-based” decision.
I'd be curious to know what regions are driving the decrease and how this generally varies by location. For example, where I live, house prices are up since December 2022 (at least according to Redfin)