- Austin, Phoenix and Raleigh housing markets have gained inventory.
- Among major metros, they led the nation for inventory growth.
- Active listings in the Austin area grew by 144% over the past year.
- These real estate markets are also seeing more price reductions.
- It’s evidence that these hot housing scenes are cooling in 2022.
Inventory shortage. That two-word phrase has appeared in countless real estate market reports over the past couple of years. In most cities across the country, a shortage of supply relative to demand has frustrated home buyers and boosted house prices like never before.
But now for the good news. We are starting to see some housing market inventory growth in major cities across the country. This trend is most noticeable within some of the hottest real estate markets, including Austin, Phoenix and Raleigh.
In fact, those three metro areas experienced a triple-digit increase in the number of property listings over the past year or so. As of summer 2022, they lead the nation in terms of inventory growth.
Major Inventory Growth in These Hot Housing Markets
On June 30, researchers from Realtor.com published a housing market update with data for the nation as a whole and the 50 largest metro areas. Among other things, this report showed how the number of property listings has changed over the past year.
As it turns out, the real estate markets of Austin, Phoenix and Raleigh experience the most inventory growth over the past year (when measured by total active listings).
Austin, Texas led the way with a whopping 144% increase in the number of active listings. Phoenix, Arizona and Raleigh, North Carolina came in second and third with 113% and 111% inventory growth, respectively.
To quote to the June 2022 realtor.com report:
“Compared to June 2021, active inventory increased in 40 of the 50 largest U.S. metros, led by Austin, Texas (+144.5%), Phoenix (+113.2%), and Raleigh, N.C. (+111.7%) .”
This is very good news for home buyers in Austin, Phoenix and Raleigh — along with other major metros were inventory is rising. This trend should make it easier for buyers to find a house that falls within budget. It could also ease competition among buyers, after two years of frenetic real estate market activity.
Austin Real Estate Market Slowing Down in 2022
No matter how you measure it, the Austin, Texas metro area has been one of the nation’s hottest housing markets for a couple of years now. But the Austin real estate scene is finally showing signs of a cooldown.
Recent data show that homes listed for sale within the Austin-Round Rock metro area are staying on the market longer these days, when compared to a year ago.
In fact, Austin was one of only 10 metro areas where the “time on market” increased over the past year.
Among the 10 metro areas where the median number of days on market rose over the past year, Austin saw the biggest increase. In June 2022, homes listed for sale in this metro area spent a median of 22 days on the market — six days longer than a year earlier.
To quote the Realtor.com report again:
“Meanwhile, time on market was flat year-over-year in six markets and grew in ten metros, led by Austin (+6 days), Denver and Detroit (+4 days each).”
But make no mistake, the Austin real estate market remains highly competitive. Tight supply conditions combined with a steadily growing population have made it one of the most competitive housing markets in the country. Slowly but surely, however, that’s starting to change.
We will likely see a further slowdown within the Austin area real estate market over the coming months, especially if inventory continues to grow.
Raleigh Experiences a Surge in New Listings
Among the nation’s 50 largest metro areas, Raleigh, North Carolina experience the third-largest increase in total active property listings. But Raleigh led the way when it comes to new listings (i.e., homes that have come onto the market more recently).
According to the Realtor.com housing market report, the Raleigh metro area had a 37% increase in new real estate listings from June 2021 to June 2022. This means more and more homes are coming onto the market, which should make things a little easier for home buyers in the Raleigh area.
Price Reductions More Common in Phoenix Area
Phoenix is another one of those red-hot real estate markets that seems to be cooling down in 2022. In addition to experiencing significant inventory growth over the past year, the Phoenix-area housing market also has more price reductions than a year ago.
In June of this year, nearly 30% of homes listed for sale within the Phoenix-Mesa-Scottsdale metro area had a price reduction. When compared to a year ago, the share of price reductions rose 22%. So it sees sellers and their agents might be sensing a cooldown in the market.
Inventory growth is one of the main reasons why sellers are starting to slash their prices, in Phoenix and in other real estate markets nationwide. These days, sellers have more competition from other homeowners who are trying to sell. So they have to be more flexible, and that often leads to price reductions.
Overall: Good News for Frustrated Home Buyers
This latest housing market report contained a slew of positive trends for home buyers across the country.
In highly competitive real estate markets like Austin, Phoenix and Raleigh, buyers are finally starting to catch a break as more properties become available.
We are also seeing a slowdown in sales activity in major cities across the country. The short version is that it’s now taking longer to sell a home (on average), and there are fewer sales in many local housing markets. Overall, the real estate market is moving at a slower pace than it was 12 months ago.
At the same time, housing costs continue to rise in most cities across the country. Through the rest of 2022 and into 2023, we will likely see a deceleration of home-price growth nationwide. Some housing markets could even see a dip in house values over the next year or so.
But for most cities in the U.S., home prices will likely continue to climb well into 2023. So a degree of urgency might still be warranted, for those who are planning to buy in the near future.