In a recent ResiClub article, the author highlights the shift in housing market dynamics post-pandemic, emphasizing the significance of comparing current active inventory to pre-pandemic levels in 2019. The analysis shows that when inventory remains low, home prices are typically more stable, while surging inventories indicate potential price declines. This metric aids in evaluating short-term pricing momentum and the overall equilibrium between buyers and sellers. The article reflects on how these trends are expected to continue into 2025, providing useful insights for housing stakeholders.
Indeed, just look at the scatter plot below showing 'Shift in home prices since their local 2022 peak' Vs. 'active inventory compared to pre-pandemic levels'.
Generally speaking, housing markets where active housing inventory for sale has surged above pre-pandemic 2019 levels have experienced weaker or softer home price growth over the past 36 months.
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