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Last month, there were 694,820 active U.S. homes for sale, according to Realtor.com. That’s up 24% from March 2023 (562,444 active listings). But on a regional level, the year-over-year shift in housing market inventory varies a lot.
In Nevada, active listings are down 26% from where they were a year prior, as markets like Reno and Las Vegas tightened up following a brief home-price correction in the second half of 2022.
Meanwhile, active listings are up 57% in Florida on a year-over-year basis, as Southwest Florida markets like Cape Coral and Punta Gorda continue to soften.
If active listings begin to rise quickly as homes sit on the market longer, in theory, it can signal a weakening market. If active listings begin to fall quickly as homes sell faster, in theory, it can signal a strengthening housing market.
Big picture: We’re observing some softening across many housing markets as higher mortgage rates temper the fervor of a market that was unsustainably hot during the pandemic housing boom.
That said, most of the country still remains below pre-pandemic inventory/months of supply. Much of the Midwest and Northeast, in particular, remains tight.
National active listings in March 2024 were still 37.7% below March 2019 levels when there were 1,115,940 U.S. homes for sale. That lack of inventory explains why home prices in many markets, despite softening and spiked interest rates, have remained resilient.
While inventory levels in Florida are up the most in the nation on a year-over-year basis (+57%), the bulk of the increase is really concentrated in sections of Southwest Florida. In particular, in markets like Cape Coral and Fort Myers, which were hard hit by Hurricane Ian in September 2022.
Hurricane Ian left behind thousands of damaged homes, and the subsequent need for renovations has resulted in a surge in available inventory. According to the National Oceanic and Atmospheric Administration, Hurricane Ian caused an estimated $112.9 billion worth of total damage, making Ian the third-costliest U.S. hurricane on record.
In addition to residential property damage, the hurricane has also coincided with spiked home insurance costs. This combination of increased housing supply for sale, the damaged homes, coupled with strained demand—the result of spiked home prices, spiked mortgage rates, higher insurance premiums, and higher HOAs—has translated into market softening across much of Southwest Florida.
While active inventory in areas like Fort Myers and Cape Coral are back above pre-pandemic inventory levels, many areas of Florida, including Miami, are still below pre-pandemic inventory levels.
If inventory continues to mount, could more parts of Southwest Florida see home price declines? Presumably, yes.
If housing affordability remains constrained and active listings/months of supply continue to spike in parts of Southwest Florida, prices could soften/further soften.
