3 Ways To Tell The Housing Market Is Shifting You Need To Know
These days everyone is looking for early signs of a shifting housing market and perhaps even a housing crash. In this article, I will detail three ways you can spot changes in your local housing market. For this post, I will use our local San Antonio housing market as an example. The same details can be used at the neighborhood or zip code level to spot trends that may point to a shift.
Before we get started you need to keep in mind that I have chosen three of my favorite early market indicators out of many others to use. There are many other ways to scrutinize the market housing market using other data but the three I have picked are relatively easy for anyone to find and understand. So let’s get started!
The three data points I have chosen are; new listings, active listings, and pending listings.
What does the new listing data tell us about the housing market?
New listing activity in any given time period is one of the earliest data points real estate pros use to measure trends in the housing markets. When homes come on the market for that first 10-day period as ‘New’ they will be categorized in this data point.
This ‘New Listing’ data point is very simple and gives us answers to multiple questions we have about a market. Are more or fewer homeowners putting their homes on the market this year/month? Are more or fewer homeowners putting their homes on the market in a given neighborhood or area?
New listings in San Antonio over the past three years
The chart above represents three years of new listing data and compares year over year changes in activity to the previous month. So, next month the data will change. Each month I send updates containing similar data to my email list. Sign up below this article or in the header.
With that data point in mind my next favorite data point is ‘Active Listings’.
What does active listings data tell us about the housing market?
First lets break down what an active listing is. An active listing is any listing that has made it past the first 10 days as a new listing and remains on the market. Again, this data point is very simple in nature but when used visually over time in a given market area and in concert with the ‘new listing’ data it can give you a firm grasp on the direction of any market.
When fewer homes make it to ‘active listing’ status the market is more favorable to sellers. When more homes make it to active listings status the market is more favorable to homebuyers.
Active Listings in San Antonio Tx
And just as we discussed the new listing activity data. Active listing data is measured month by month in previous months.
Finally we take a look at ‘Pending Listings’ activity.
What does pending listings data tell us about the housing market?
‘Pending listings’ data being our third and final data point for this article is a crucial early indicator of the direction of a housing market. Pending listings are listings that have cleared many of the contract hurdles and are ready to close. Some of the hurdles include; home inspections, negotiations for repairs and pricing concessions.
With this data point it is always helpful to compare it with one or both of the previous data points. Otherwise, false assumptions may be reached in particular circumstances.
When ‘pending listings’ rise over time this may be an indication of an advantage to homesellers.
When ‘pending listings’ fall over time this might indicate an advantage to homebuyers in the market.
Pending Home Sales In San Antonio TX
Pending home sales rise and fall for various reasons. When comparing pending home sales keep in mind that a larger overall market that is growing due to increase in population may naturally increase in pending home sales over time. However, pending home sales in an established neighborhood may offer more guidance since the total number of homes tends to be set.
Final Words
There are really endless ways to dig into the health and activity of a housing market. I chose to use three that may be the most understandable and accessible to the general public. Each week I share data and opinions about the local and national markets. Sign up to my email list for the most up to date data I share each week.
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