The 2024 housing market has looked progressively healthier with each passing month. We’re far enough into the year to know that inventory levels are about as good as we could’ve hoped. In 2023, single-family home inventory followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings slowed the market considerably last year. Even though sales volume this year was similar to last, far more new listings have come to the market, which has allowed inventory to grow. In July 2024, the number of homes for sale was 24% higher than last year and 1% higher than in July 2022.
Typically, inventory begins to increase in January or February, peaking in July or August before declining once again from the summer months to the winter. It’s looking like 2024 inventory, sales, and new listings will resemble historically seasonal patterns, and at more normal levels. Now that we’re more than halfway through the year, we expect inventory, sales, and new listings to decline through the rest of the year.
Months of Supply Inventory in July 2024 indicated a sellers’ market for single-family homes and a balanced market for condos
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). MSI trended higher in the second half of 2023, hovering between a balanced market and a sellers’ market. MSI in the North Bay market has trended horizontally for the past nine months. However, in July, single-family home MSI fell, implying the market shifted more favorably toward sellers, while condo MSI rose above three months of supply, indicating the market is more balanced.
