In December, monthly home sales dropped by their largest margin since May 2020, with the decline attributable to a shortage in offerings, rather than interest, according to a new report from
Seasonally adjusted homes sold fell by 3.6% in December to approximately 579,300, the steepest decline since the first few months of the pandemic. December’s numbers also came in 10.7% lower year-over-year, the largest annual drop since June 2020, according to the report.
Seasonally adjusted active listings — the count of all homes for sale at any time during the month — also fell monthly by 3.2% and 18.9% on an annual basis to an all-time low in December, while new listings slipped 2.4% compared to November and dropped 13.4% below levels from a year earlier.
“Home sales are slumping, but not for lack of demand,” said Redfin chief economist Daryl Fairweather, in a press release “There are plenty of homebuyers on the hunt, but there is just nothing for sale. In many markets, shopping for a home feels like going to the grocery store only to find the shelves bare.”
Inventory shortages also kept prices at an elevated level, up 15.2% since December 2020, with the median at $382,900. December was the 17th consecutive month of yearly double-digit increases.
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On the opposite end of the scale, Southeast cities led the list among the relatively few markets posting year-over-year sales increases. Greenville, South Carolina, saw a 9.4% annual gain, followed by Greensboro, North Carolina with 7.9% and Baton Rouge, Louisiana, at 7%. Milwaukee followed with 5.5%, and tying for the fifth spot was Honolulu and Tulsa, Oklahoma, with 3.8%.
Trends seen towards the end of 2021 are likely to continue in the short term, Fairweather said. She recently noted that
“In January, I expect to see more buyers and sellers in the market, but demand will increase more than supply — pushing prices higher at the start of this year.”
Although heightened demand is likely to continue, December’s data indicated home-buying competition easing slightly across the country, especially when compared to the torrid summer of 2021. Homes spent longer on the market — increasing to 24 days on average compared to a record low of 15 in June. A year ago, homes were listed for an average of 31 days before selling.
Homes were also less likely to sell above list price. In December, 43% of homes were purchased above list price, compared to 57% in June, but still up from 34% year over year.
