Pressure is back on sellers to attract buyers as demand softens

Rhea-AI Summary

The housing market is stabilizing post-pandemic, with homes selling faster than pre-pandemic but slower than last year. A Zillow analysis reveals that homes typically went pending in 19 days in September, although the median age of inventory rose to 54 days, a 45% increase from last year. With 32% fewer active buyers compared to last year, sellers must competitively price their homes to attract buyers. Markets like Austin and Las Vegas show mixed trends in selling speeds, indicating varied demand based on home types and locations.

Positive

• Homes are selling faster than pre-pandemic norms despite longer selling times compared to last year.
• The median days to pending is 19, which is 10 days faster than in September 2019.

Negative

• The median age of inventory rose to 54 days, a 45% increase from last year.
• Buyer demand has decreased by 32% compared to the previous year due to affordability issues.

Homes that sell are doing so quickly, while others are languishing on the market

• Homes are lingering on the market longer than they did last year, but still moving faster than pre-pandemic norms. 
• Gaps between the median age of inventory and typical time on the market for homes that sell can reveal markets in which certain home types, neighborhoods or price points are in demand, while others linger on the market. 
• While buyers have won back some negotiating power, sellers with an attractive listing can still expect a fairly quick sale. 

SEATTLE, Oct. 31, 2022 /PRNewswire/ -- The housing market is rebalancing after the most competitive and frenetic period in recent memory. While homes that sell are still doing so relatively quickly — slower than at the height of last year's frenzy, but more quickly than pre-pandemic norms — a new Zillow^® analysis finds other homes are lingering on the market much longer, pointing to the need for sellers to build an attractive and competitively priced listing to attract a buyer in today's market. 

Differences in days to pending (the median number of days homes that sell have been listed before an offer is accepted) and the age of inventory (the median number of days homes currently listed for sale have been on the market) can reveal valuable information for home sellers, especially during a time of transition, like now. Markets with a large spread in these two metrics may be seeing certain home types, neighborhoods or price points attracting buyers, while others are not.

Homes that went pending in September typically did so after 19 days. That's a far cry from the record lows seen during much of the pandemic when homes went pending after a week on the market, but 10 days faster than in September 2019. However, that only takes into account homes that find a buyer. Looking at the full stock of for-sale listings, homes have been on the market a median of 54 days as of mid-October, a 45% increase from a year earlier. 

"Last year, sellers could seemingly list their home at any price and see multiple offers roll in above list price within days," said Zillow senior economist Nicole Bachaud. "Now, buyers have some negotiating power, and sellers are under pressure. Buyers are still out there and willing to buy when they find the right home at the right price, which will provide a floor for the price declines we are currently seeing. But sellers need to do things right to attract the attention of these buyers — pricing their home competitively and making their listing attractive to online home shoppers. Especially in a market that's quickly changing like today's, working with an experienced agent who knows the local market is valuable."

Since an all-time low of 19 days in early April, the median age of inventory on Zillow has grown at the fastest rate since at least 2018, when this analysis began. While demand has certainly cooled — Zillow estimates there are 32% fewer active buyers than there were a year ago, though still more than there were in September 2019 — the rapid growth in the median age of inventory may say more about how intensely competitive last year was than about what is happening today. In 2021, the flow of new listings was on par with prior years, but there were so many buyers flooding the market that listings were gone in the blink of an eye. 

Even now, the median age of inventory is 30% below pre-pandemic norms. If age of inventory continues to grow at this rapid pace — not a bad bet given we are nearing what is usually the slowest time of year for the housing market — inventory is estimated to be on the market a median of 68 days by the end of this year. That would be more than a month shorter than before the pandemic. For-sale homes had typically been on the market for 100 days at the end of both 2018 and 2019. 

The rapid increase in the age of inventory is primarily because the dip in buyer demand has been deeper than the drop in new listings. Buyers are pulling back primarily due to affordability hurdles, as mortgage rates have risen, and the pace of sales has slowed. Homeowners are reluctant to sell and give up what is likely a mortgage rate of around 3% in order to buy a new home at today's interest rates. The lack of new inventory hitting the market means the share of inventory taken up by listings a week old or less is down 42% from a year ago. 

Markets in which both days to pending and the median age of inventory are growing indicate demand is slowing across the board. Many of these markets were among the hottest during the height of last year's buying frenzy and had plenty of room to cool. Austin and Las Vegas are prime examples. 

Some markets have seen days to pending stay fairly low, while the median age of inventory has risen much more. This indicates that a subset of homes continue to see strong competition as buyers snatch them off the market quickly, while others linger. One example is St. Louis, where typical days to pending has remained about a week, while the median age of inventory has jumped to 40 days from a low of nine days this spring. 

Homeowners who are thinking about selling their home should consider their online curb appeal. Zillow 3D Home tours can help a listing stand out — two-thirds of buyers say 3D tours help them get a better feel for the space than static photos, and prior Zillow research has shown homes that feature a Zillow 3D Home tour are more likely to be "favorited" (saved on Zillow for future viewings) and viewed than those listings without.ⁱ Hiring an agent with a pulse on a seller's local market can help as well, advising the seller through all the critical decisions during the process. Sellers can click Agent Finder on the Zillow homepage to help identify the right agent by reading customer reviews and reviewing an agent's recent sale history.

 

Metro Area*	Median Age of Inventory (week of Oct. 16, 2022)	Median Age of Inventory (pre-pandemic average)**	Median Days to Pending (September 2022)	Median Days to Pending (September 2019)
United States	54	78	19	29
New York, NY	71	87	40	56
Los Angeles, CA	49	55	24	28
Chicago, IL	57	81	20	35
Dallas–Fort Worth, TX	43	59	20	37
Philadelphia, PA	49	68	13	28
Houston, TX	57	83	25	37
Washington, DC	38	51	15	19
Miami–Fort Lauderdale, FL	63	98	25	47
Atlanta, GA	49	64	20	25
Boston, MA	38	47	9	15
San Francisco, CA	37	33	19	15
Detroit, MI	50	59	16	23
Riverside, CA	56	61	30	28
Phoenix, AZ	54	42	35	20
Seattle, WA	42	46	N/A	11
Minneapolis–St. Paul, MN	37	49	24	27
San Diego, CA	42	53	22	22
St. Louis, MO	40	74	8	15
Tampa, FL	51	57	18	24
Baltimore, MD	41	64	13	32
Denver, CO	40	45	N/A	15
Pittsburgh, PA	56	84	17	34
Portland, OR	51	63	19	24
Charlotte, NC	44	58	15	18
Sacramento, CA	49	54	24	16
San Antonio, TX	53	69	26	47
Orlando, FL	53	58	18	25
Cincinnati, OH	35	59	6	11
Cleveland, OH	47	70	10	41
Kansas City, MO	35	60	7	15
Las Vegas, NV	66	54	33	32
Columbus, OH	34	49	6	10
Indianapolis, IN	39	56	9	12
San Jose, CA	33	35	17	21
Austin, TX	61	60	44	31
Virginia Beach, VA	35	80	22	47
Nashville, TN	44	53	20	32
Providence, RI	37	64	14	35
Milwaukee, WI	35	52	34	41
Jacksonville, FL	52	70	25	42
Memphis, TN	42	61	21	22
Oklahoma City, OK	52	77	11	26
Louisville, KY	39	56	10	18
Hartford, CT	33	80	10	29
Richmond, VA	32	56	7	17
New Orleans, LA	63	88	22.5	36
Buffalo, NY	41	58	12	21
Raleigh, NC	40	50	16	17
Birmingham, AL	54	79	12	17
Salt Lake City, UT	45	39	21	16
*Table ordered by market size
**Pre-pandemic average is the average of the median ages of inventory in the weeks of October 21, 2018 and October 20, 2019

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow^® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease. 

Zillow Group's affiliates and subsidiaries include Zillow^®; Zillow Premier Agent^®; Zillow Home Loans™; Zillow Closing Services™; Trulia^®; Out East^®; StreetEasy^®; HotPads^®; and ShowingTime+™, which houses ShowingTime^®, Bridge Interactive^®, and dotloop^®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

ⁱ In the first six months of 2022, for-sale home listings on Zillow with a Zillow 3D Home tour were favorited 97% more and viewed 78% more than for-sale home listings without a Zillow 3D Home tour (daily average).

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SOURCE Zillow

FAQ

What is the median age of inventory for homes as of mid-October 2022?

The median age of inventory is 54 days as of mid-October 2022.

How does current home selling time compare to pre-pandemic norms?

Homes are selling faster than pre-pandemic norms but slower than during last year's market.

What factors are causing buyers to pull back from the housing market?

Buyers are pulling back mainly due to increased mortgage rates and affordability hurdles.

Which markets are showing mixed trends in home selling speeds?

Austin and Las Vegas are examples of markets with mixed trends in selling speeds.

How long did homes typically take to go pending in September 2022?

Homes typically went pending after 19 days in September 2022.