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, although single-family home inventory is still lower than we would like. In 2023, single-family home and condo 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. Condo inventory even reached a four-year high in September before declining in October and November. For single-family homes, inventory is up slightly year over year, but inventory fell significantly month over month as new listings declined at a greater magnitude than sales.
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 than last year.
Months of Supply Inventory in November 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). The East Bay market tends to favor sellers, especially for single-family homes, which is reflected in its low MSI. For condos, MSI has trended higher in 2024, causing a shift from a sellers’ market to a buyers’ market, then back to balanced. Although single-family home MSI has moved slightly higher in 2024, it’s still low, indicating a sellers’ market.
