Sellers coming out of the closet with their vacant homes. Active listings exploded the most in San Diego (+77%).
By Wolf Richter for WOLF STREET.
New listings jumped in September, when they normally fall in September and for the rest of the year. This was the first time in the data going back to 2016 that new listings didn’t fall in September, according to data released today by Realtor.com (red line = 2024; green line with black dots = 2019):
The Seattle metropolitan statistical area (MSA) had the biggest year-over-year surge in new listings (+42%), followed by the southern part of Silicon Valley (San Jose-Sunnyvale-Santa Clara). Of the biggest 50 MSAs, new listings rose by double-digit percentages in 26 of them. This is occurring even as demand for these homes has wilted:
| Metro September 2024 | New Listings % YoY |
| Seattle-Tacoma-Bellevue | 42% |
| San Jose-Sunnyvale-Santa Clara | 27% |
| Washington-Arlington-Alexandria | 26% |
| Denver-Aurora-Lakewood | 26% |
| Boston-Cambridge-Newton | 24% |
| Raleigh-Cary | 24% |
| Los Angeles-Long Beach-Anaheim | 23% |
| San Diego-Chula Vista-Carlsbad | 22% |
| Providence-Warwick | 22% |
| Richmond | 20% |
| San Francisco-Oakland-Berkeley | 20% |
| Las Vegas-Henderson-Paradise | 16% |
| Oklahoma City | 16% |
| Portland-Vancouver-Hillsboro | 15% |
| New York-Newark-Jersey City | 15% |
| Riverside-San Bernardino-Ontario | 15% |
| Baltimore-Columbia-Towson | 14% |
| Nashville-Davidson-Murfreesboro-Franklin | 14% |
| Phoenix-Mesa-Chandler | 12% |
| Detroit-Warren-Dearborn, Mich. | 12% |
| Atlanta-Sandy Springs-Alpharetta | 12% |
| Miami-Fort Lauderdale-Pompano Beach | 10% |
| Charlotte-Concord-Gastonia | 10% |
| Hartford-East Hartford-Middletown, Conn. | 10% |
| Kansas City, Mo.-Kan. | 10% |
| Minneapolis-St. Paul-Bloomington | 10% |
Active listings (total inventory minus listings with a pending sale) surged 34% year-over-year, to 940,980 listings, the highest since April 2020, and the highest for any September since 2019, as sales have wilted and as inventory gets stale because prices are way too high (data via Realtor.com).
Of the biggest 50 metros, active listings exploded in the San Diego MSA (+77% year-over-year), followed by Tampa (+74%), Orlando (+69%), Seattle (+68%), and Miami (+68%).
The red line = 2024, purple line with black dots = 2019. The four lines below the 2024 line are the years 2020, 2021, 2022, and 2023 (data via Realtor.com).
The combination of wilting demand and surging active listings means that sellers put vacant homes on the market after having already moved out perhaps years ago, but kept the vacant home off the market to ride up the price spike all the way. We can see that because a seller that puts their home on the market that they still live in will buy another home to move into, and so demand rises by 1 home and active listings rise by 1 home, and both rise.
Now demand is falling and active listings are rising. So these are the vacant homes coming on the market that sellers had already moved out of and have kept off the market for years – which was responsible for the inventory shortages in 2020-2022, and we discussed that a lot at the time.
The San Diego MSA is #1. These are the 30 metros of the 50 biggest metros where active listings have surged the most:
| Metro September 2024 | Active Listings % YoY |
| San Diego-Chula Vista-Carlsbad | 77% |
| Tampa-St. Petersburg-Clearwater | 74% |
| Orlando-Kissimmee-Sanford | 69% |
| Seattle-Tacoma-Bellevue | 68% |
| Miami-Fort Lauderdale-Pompano Beach | 68% |
| Jacksonville | 62% |
| Denver-Aurora-Lakewood | 62% |
| Charlotte-Concord-Gastonia | 61% |
| Atlanta-Sandy Springs-Alpharetta | 53% |
| Dallas-Fort Worth-Arlington | 49% |
| Sacramento-Roseville-Folsom | 49% |
| Phoenix-Mesa-Chandler | 49% |
| Raleigh-Cary | 48% |
| Las Vegas-Henderson-Paradise | 47% |
| Los Angeles-Long Beach-Anaheim | 47% |
| Riverside-San Bernardino-Ontario | 40% |
| San Jose-Sunnyvale-Santa Clara | 39% |
| Columbus | 39% |
| Oklahoma City | 38% |
| Memphis | 37% |
| Cincinnati | 35% |
| Providence-Warwick | 33% |
| Louisville/Jefferson County | 31% |
| Nashville-Davidson-Murfreesboro-Franklin | 31% |
| Houston-The Woodlands-Sugar Land | 30% |
| Boston-Cambridge-Newton | 30% |
| Birmingham-Hoover | 30% |
| Portland-Vancouver-Hillsboro | 28% |
| Richmond | 28% |
| San Francisco-Oakland-Berkeley | 28% |
But buyers are still on strike because prices are too high.
Demand for existing homes has wilted as buyers have gone on strike because prices are too high, and what’s on the market is taking much longer to sell.
Many buyers have switched to buying new houses because homebuilders understand this market and have offered homes at lower prices and have thrown incentives into deals, and have spent massively to buy down mortgage rates, and so new house sales have remained strong, amid surging supply of spec homes.
The most current measure of demand – the weekly applications for mortgages to purchase a home, released by the Mortgage Bankers Association – shows that demand for homes remains wilted. Purchase mortgage applications have been running along historic lows for a year and remained there over the weeks since the Fed’s rate cut:
Mortgage rates have risen since the rate cut. After briefly touching 7.8% in October 2023, mortgage rates zigzagged lower to briefly touch 6.09% last month, according the weekly Freddie Mac data, as a bunch of rate cuts were being priced in.
But when the Fed finally did cut its policy rates by 50 basis points on September 18, mortgage rates – following longer-term Treasury yields – started inching higher, confounding hopes that the actual rate cuts would reduce mortgage rates even more than the bunch of priced-in rate cuts already had. So the Fed cut its policy rates, and mortgage rates rose.
The daily measure by Mortgage News Daily has already risen to 6.26% as of today, from the low of 6.11% before the rate cut:
The median listing price in September dropped for the third month in a row from the seasonal peak in June, which had been lower than the all-time peak in June 2022, and flat with June 2023. Year-over-year, the median listing price was down 1.1% (data via Realtor.com):
For the past four months, the median listing price has been below where it had been in the same period 2 years earlier. This percentage change from 2 years ago shows how insane sellers’ pricing expectations had gotten in 2021 and 2022.
That price spike was why many homeowners who’d bought a another home to move into didn’t sell the old home they’d moved out of because they wanted to ride up the price spike all the way, and now those vacant homes are starting to come on the market.
So supply is piling up. And sellers are becoming a little more motivated. Median listing prices show where sellers stand. To make a deal, they need buyers, and actual buyers determine the selling price, and the prices of closed sales, which we’ll get later this month, show where actual buyers stood.
Here are the 23 metros of the biggest 50 metros with the largest year-over-year drops in median listing prices, according to Realtor.com:
| Metro September 2024 | Median Listing Price | % Change YoY |
| Miami-Fort Lauderdale-Pompano Beach | $525,000 | -12% |
| Cincinnati | $337,000 | -10% |
| San Francisco-Oakland-Berkeley | $997,500 | -9% |
| Kansas City, Mo.-Kan. | $389,500 | -8% |
| Austin-Round Rock-Georgetown | $520,000 | -7% |
| Jacksonville | $399,000 | -6% |
| Denver-Aurora-Lakewood | $610,250 | -6% |
| Orlando-Kissimmee-Sanford | $429,950 | -6% |
| Tampa-St. Petersburg-Clearwater | $414,948 | -6% |
| Nashville-Davidson-Murfreesboro-Franklin | $547,865 | -5% |
| San Diego-Chula Vista-Carlsbad | $997,000 | -5% |
| Oklahoma City | $314,950 | -5% |
| Seattle-Tacoma-Bellevue | $772,425 | -3% |
| Portland-Vancouver-Hillsboro | $604,890 | -3% |
| New Orleans-Metairie | $325,000 | -3% |
| Minneapolis-St. Paul-Bloomington | $432,500 | -3% |
| San Antonio-New Braunfels | $339,948 | -3% |
| Atlanta-Sandy Springs-Alpharetta | $414,560 | -3% |
| Washington-Arlington-Alexandria | $599,948 | -2% |
| Dallas-Fort Worth-Arlington | $439,450 | -2% |
| Phoenix-Mesa-Chandler | $519,850 | -2% |
| Sacramento-Roseville-Folsom | $635,000 | -2% |
| Los Angeles-Long Beach-Anaheim | $1,154,440 | -2% |
Median Days on the Market: The median number of days a property sat on the market for sale before it sold or before it was pulled off the market rose to 55 days in September, the highest for any September since 2019 (red line = 2024, purple line with black dots = 2019).
This number shows a mix of:
- How aggressively sellers pulled listings off the market if it didn’t sell;
- And how fast properties sold that did sell.
The number is kept down by sellers pulling their home off the market when it doesn’t sell, to then relist it later at a lower price, or as rental or vacation rental, or not list it at all for a while.
When sellers get more desperate to sell the property, they leave it on the market and reduce prices until it sells, and the days on the market lengthens.
Price reductions: The share of active listings with price reductions in September, at 34.5%, was the highest share in the data going back to 2016 except for 2018, 2021, and 2022. The years with the highest asking prices after a huge spike – 2022 and 2023 – were also the years with the biggest share of price reductions (black and green lines).
All other years were lower, including 2019 (purple line with black dots). But those price reductions clearly aren’t enough to bring buyers into the market (data via Realtor.com):
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Only if I can post gif in this comment section, I would gladly insert a picture of Mr. Burns from The Simpson doing his “Excellent” gesture to all these supplies coming to the market….although it will still take a while for MSM narrative to stop screaming about we don’t have any supply…hopefully give it another couple of months…
That SD 77% and LA/LB 43% sure look encouraging, just have to see how long it takes before the majority of the sellers come back from lunch with their pricing. One quick look in Redfin and Zillow, you still see it’s dominated by make a wish asking price…
PI— glad to hear you feel hopeful and like Mr. Burns… haha but how much longer are you willing to wait? I’ve read your comments for a long time and related to you having a young family (we are from San Diego.) We finally got out of hotel California this summer for much greener pastures. We bought our dream home in a smaller city with excellent schools, low crime, good food, etc. for, get this—$525k (2700 sq feet brick colonial). No more slum lord. Yes, it’s hard leaving family and friends—it’s a bold move. Careers are also a factor of course. I’m sure things will change eventually because they always do—but is it worth it to keep waiting? California is crazy. And let me say, people out here are so much more pleasant because they are happier. Wishing you all the luck, fingers crossed for the correction California needs.
Hi LD,
Please tell where did you move, I won’t tell anyone :-).
I am stuck in SD for next few years :-(.
I agree with LD.
@LD I think you made a smart decision. I’ve lived in CA my entire life but if I was younger and not making crazy money I would leave the state and not look back. With the money you save not living in CA full time, with cheaper rent or mortgage, cheaper gas, cheaper electricity, cheaper food etc. etc. you should have penty of money to fly out and visit family and friends a couple times a year (or they may start moving after flying out to visit you). P.S. I just Zillowed the modest (2,300sf 3×2) home I bought on SF Peninsula for just over $400K in 1994 and sold for just over $1.2mm in 2005 and the current Zestimate is $2.7mm (you can get a LOT more home for a LOT less in another state)…
“and for the resto of the year.”
North Beach is rubbing off on you.
Lemme see: New construction with incentives, rate buy downs and possible warranties etc. VS
Your now 2-4 year vacant “used” house at a higher price?
In a property management driven area I see the wear a house gets when vacant. People have an ideal that it’s just waiting for them to walk back in the door and turn up the thermostat!
The reality is time is destructive and certain systems breakdown more rapidly when idle than with regular use.
Also I see a 2% sag in some majorly inflated areas (LA) and the fallacy of the falling mortgage rate blowing up as people had already bought that rumor and are selling the news (hint: the news is higher for longer).
Higher rates, inflation and prices. “The top isn’t in… until AFTER I sell!”
Film and television industry continues to nosedive as well.
I live in San Diego and the prices are just not realistic.
It’s a nice enough place to live but buyers wanting $1.5m for a house in the suburbs in the middle of SW dirt is just a fantasy. People lost their minds during covid era rates. The homes were $700-800K in 2020 and the buyers who didn’t buy didn’t forget that home prices almost doubled in two short years.
I am in SD as well and I agree with you 100% despite being a home owner. Home prices in SD needs to fall a lot.
My neighborhood, average home price is above 1.5 million and because of high home prices, young families can’t move in and thus demography is looking pretty old in my hood.
Prices have increased 100% from 2020 price.
***Take it for what it’s worth*** and ***consider the source***, but yesterday Redfin was claiming a recent, seasonally unusual jump in demand, suggesting that buyers are beginning to respond to lower rates.
Of course, one person’s jump is another person’s squiggle. And it’s just one data point from one source.
Redfin is a brokerage, and they make their money off commissions, and they want a jump in demand (even if it’s just a weekly squiggle), and they want to get people to buy because that’s how they get paid.
I would plot the 30 year mortgage rate vs purchase mortgage applications to highlight how rates aren’t the problem. I’d also plot the metro areas listings increase with their median listing price on the x axis. I’ve used plotly in the past to make really data rich charts that help with analysis
More supply means more homes to look at! The misses will shop all these homes until she finds that Dream Kitchen! Then BINGO…..write the check!
(the above is a personal experience by a *former* wife) LOL!
I think what we ultimately will see unfold, is a collision between resilient sellers and buyers. A battle of most sellers being stubborn, wanting maximum profits and sellers that are unmotivated to toss money down the drain.
The buyers can wait in nice new apartments buying time — while sellers watch inventory climb higher. A game of chicken that will break the weaker players while the really stubborn players wait for baby boom retirees that have excess cash to burn.
I’ve never totally bought the supply shortage narrative — I think this was always demand driven, with pandemic panic buying, pandemic pricing and tulip bubble chasing, highly influenced by baby boomer dynamics.
There was a narrative that the pandemic accelerated technology growth and adoption — probably true — but the pandemic greatly accelerated baby boom spending and life restructuring, which amplified a housing bubble. No surprise, but that trend may not be over, which will add a new twist to any housing correction. I think there will be plenty of these babes nibbling around the edges, while everyone else is priced out. Somewhere in that mix, new homes will be extremely competitive as an alternative….
That will be a weird equilibrium — where there’s no crash, but steady ongoing declines in median values.
@Redundant like you “I’ve never totally bought the supply shortage narrative” since most people pushing for more homes or apartments are the people actually making money building new homes or apartments. There was an actual toilet paper and Ford F150 “shortage” in 2020 since you could go to ten stores and ten dealers and not find a single roll of TP or single F150 for sale, but with rare exceptions there are quite a few homes for sale and apartments for rent in every big city in the state. We would all be better off if jobs and people moved to places that had more “affordable” housing rather than CA increasing our already high taxes even more to build $500K to $1mm subsidized apartments that are rented at “affordable” prices (usually to the politically connected).
Will the next banking crisis occur when all those people who overpaid for thier homes need to unload them (job change, layoff, back to office in another state) find they are unsellable, and they just walk away like some of the CRE landlords? As prices continue downward, these homeowners will have more and more NEGATIVE equity. Someone is going to get the short end of the stick.