The 2024 housing market looked progressively healthier with each passing month until Q4. The promising build in inventory during the first nine months of the year was wiped out, and East Bay inventory fell near record lows in December.
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 2024 was similar 2023, far more new listings came to the market, which has allowed inventory to grow. Condo inventory even reached a four-year high in September before declining in Q4. 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 December 2024 indicated a sellers’ market
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. In Q4, MSI dropped across the East Bay and now indicates a sellers’ market.