I don’t want to make too much of one month — especially when that month is February (short and in the seasonal dead zone). But with that said, February’s move in of months of inventory looks a bit ominous:
Months of inventory has tended to drop in February, both in the past 2 years and on average in the 5 years leading up to the pandemic nuttiness. Last month it actually rose to a level well above the pre-pandemic average for Feburary.
On the other hand, closed prices were up ~3% in February:
I’m looking forward to the March data to help us make heads or tails of this. For now, more graphs below.
Inventory lines up with what I was seeing last month just walking around. More increased inventory during peak selling season might seem like it could be a the start of a peak? Who knows…
Curious if March San Diego is same story as national: https://www.advisorperspectives.com/dshort/updates/2025/03/25/house-price-index-fhfa-up-january-2025
It’s very hard to predict the future, but any idea what the effects of a recession would be on home prices? My guess is that a lot of the people who bought homes right on the edge of their budgets (anecdotally, basically every first time home buyer from last 3 years) will be in hot water and have to sell if they lose their jobs
I think it would be not good… it could bring out more inventory if people were forced to leave for job reasons (either relocating, or because they could no longer afford the home). It would also cramp demand if people were worried about job stability.
On the upside, there’s a decent chance it would bring rates down. But that could unlock even more rate-locked inventory. So overall it seems like it would be a negative but of course that depends on how deep/prolonged the recession is, along with what else is going on at the same time.
Guess were probably gonna find out
I’m curious about the impact of the current stock market meltdown and the tariff war on the housing market. My guess is that sellers will panic, and buyers will be more cautious.