Stale listings driving housing inventory rise, Redfin says

November's active listings of homes for sale was at its highest point on a seasonally adjusted basis since 2020, but that was not for a good reason, Redfin commented.

The increase is due to what the real estate company called "a pileup of unsold homes," because buyers considered them to be undesirable, primarily because they were overpriced.

This comes at the same time that pending home sales increased for the fourth month in a row in November to their most since early 2023, the National Association of Realtors said on Dec. 30. The annualized pace of existing home sales also topped 4 million during that month.

"A lot of listings on the market are either stale or uninhabitable," Meme Loggins, a Redfin agent from Portland, Oregon, said in a press release. "There's a lot of inventory, but it doesn't feel like enough."

During November, 54.5% of all properties listed for sale have been on the market for 60 days or longer, without entering into contract.

That is the highest share for any November since 2019, Redfin said. During November 2023, this was the case for 49.9% of listings.

It is also worse than it was this past May, when approximately two-in-five properties had not gone into contract within 60 days of listing, an earlier Redfin report found.

Those homes which did sell did not move off the market quickly. The typical home that did go under contract last month did so in 43 days, the slowest November pace since 2019, Redfin noted.

It is the lower end of the market where the stale inventory is found, Loggins said, pointing out homes priced $650,000 or below typically attract the most competition from buyers. But these are the ones sitting on the market now because sellers in that price range are most likely to overprice.

The two states with the highest level of homebuilding activity — Florida and Texas — also had the locations that had the largest share of stale listings. Redfin also cited other reasons for why Florida is particularly impacted, including surging homeowners association fees, high insurance costs and destructive natural disasters, all of which are holding sales activity down.

In order, the five markets with the highest share of listings in November on the market for 60 days or longer are: Miami, 63.8%; Austin, Texas, 62.4%; Fort Lauderdale, Florida, 62.3%; San Antonio, 60.3%; and Orlando, Florida, 59.9%.

Of the five cities with the largest year-over-year increase, four are in Florida: Tampa, 12.3 percentage points; Fort Lauderdale, 12 percentage points; Orlando, and West Palm Beach, both at 11 percentage points. The other city on the list is San Diego, also at 11 percentage points.

Only three cities saw an improvement in the share of stale listings in the market: Philadelphia by 1.7 percentage points to 51%; Chicago, 0.7 percentage points to 44.9%; and San Francisco, 0.5 percentage points to 53.4%.

In comments on the pending home sales data released by the National Association of Realtors on Monday morning, Odeta Kushi, deputy chief economist at First American, said that buyers were taking advantage of the increased inventory during November, even though mortgage rates maintained their upward movement.

"We find the strongest supply surges in Southern and Western markets, but more muted improvements in the Northeast and Midwest," Kushi said in a statement. "Where supply surges, improving affordability often follows, which may bring buyers off the sidelines, unlocking pent up demand and reinvigorating market activity in the new year."