Supply Just Crossed a Line This Territory Hasn't Seen in a Month

Something has shifted under this market's feet, and it took three straight weeks to become obvious.

This week's read on months of supply, the measure of how long it would take to sell everything currently on the market at the current pace of sales, came in at 7.30 months. That is up from the level reported in each of the prior two weeks. Three readings, three weeks, one direction. That is not a blip. That is a level crossing, and it means the balance between buyers and sellers has moved meaningfully looser than it was a month ago.

Here is the plain-language verdict: this is shaping up as a buyer's market, and it is getting more so by the week.

New listings this week fell to 51, down about 46% from the trailing four-week average of roughly 94.

Closings fell to 93, down about 41% from a baseline near 157. The active pool, at 728 homes, eased only about 12% from its own baseline. Supply is not clearing as fast as it is piling up.

Price softened too. The territory's median sale price this week was $295,000, down about 10% from the four-week average of $329,617. Median list price held closer to flat, off about 2% from a baseline near $345,233. Days on market fell to 40, about 11% below its baseline, though that reading sits alongside fewer overall closings, so it is worth watching rather than celebrating.

Now the tension. Two zip codes did almost all of the territory's selling this week, and they are telling opposite stories about pricing power. In 57108, 31 homes closed at a median sale price of $410,000, above that zip's own median list price of $381,745. Sellers there are closing above the ask. Just across town, in 57105, the territory's busiest zip with 37 closings, the median sale price was $260,000 against a median list price of $319,900. Buyers there are closing well under the ask.

That is not one market. That is two markets sharing a territory, moving in opposite directions in the same week.

What that means depends on where you are standing. If you are selling in 57108, this week's closings suggest buyers there are still willing to meet or exceed list price, so a well-positioned listing does not need to be given away. If you are selling in 57105, the recent numbers argue for pricing conservatively rather than testing the market's patience, since buyers there have been negotiating list prices down by a wide margin this week. If you are buying anywhere in the territory, the loosening months-of-supply figure and the falling new-listing count both point the same way: less competition for the homes that are out there, and more room to negotiate than there was a month ago.

None of this is one week's noise. It is the third straight week the supply figure has climbed, and the gap between 57108 and 57105 shows up in this week's own closing data, not a guess about next week's. What to watch from here is whether next week's months-of-supply reading keeps climbing past this week's level or levels off. A fourth straight rise would confirm this is a real shift in territory balance rather than a temporary lull. A leveling off would suggest this week was closer to the top of the swing.

Figures in this report are drawn from Redfin zip-level aggregates via Listing Leads.

Michelle Maloney