In August, home sales, inventory, and new listings declined slightly, which is normal for this time of year. Compared to this time last year, inventory has increased significantly, up 28%. Sales are up 2% for single-family homes, while condo sales fell 12%. Any amount of increasing inventory is good for the Alameda market. Inventory still has a long way to go before the market begins to become more balanced. When we take a longer look back and compare the supply of homes in August 2019 (pre-pandemic) to now, active listings have decreased by 40%. With that in mind, it should be no surprise that sales have declined by 34%.
Total inventory has trended lower essentially since 2010, but active listings fell precipitously from July 2022 to December 2022, as sales outpaced new listings, before stabilizing to a degree from January 2023 to the present at a depressed level — still 24% lower than two years ago. Low inventory and new listings, coupled with high mortgage rates, have led to a substantial drop in sales and a generally slower housing market. 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. In 2023, sales and inventory didn’t resemble the typical seasonal peaks and valleys. It’s looking like 2024 inventory, sales, and new listings will follow historically seasonal patterns, albeit at a depressed level. It’s clear that supply will remain tight until spring 2025 at the earliest.
Months of Supply Inventory in August 2024 indicated a sellers’ market for single-family homes and a buyers’ 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 Alameda housing market tends to favor sellers, which is reflected in its low MSI, especially for single-family homes. MSI has been below three months since July 2012 (2012 is not a typo!) for single-family homes. In 2024, MSI has risen meaningfully for condos. In August, condo MSI indicated a buyers’ market, while single-family home MSI still implied a strong sellers’ market.