The housing market has shifted into neutral, with buyers remaining on the side lines and sellers pulling in their horns.
That’s the gist of Zillow’s August housing report, which found that the buyer’s market appears to have been short-lived.
The share of listings with price cuts dipped from the all-time high of 27% in July to 26% in August, the popular listing site reported. At the same time, new listings “have slowed to a trickle.”
“Buyers still in the market have plenty of opportunity, especially in inventory-rich environments,” the report said. “But the competitive momentum that has been swinging fast in buyers’ favor in recent months is showing signs of stopping nationwide.”
Zillow says the market now is “balanced” between buyers and sellers nationwide, with less competition among buyers than in any August since 2018. And as a result, appreciation also has slowed to a standstill.
In another sign of the buyer pull-back, houses are taking longer to sell. The median time on market for a sold home was 27 days in the month, a “full week” longer than last year and one day longer than pre-pandemic norms.
Meanwhile, would-be sellers have responded to buyers’ caution by pushing their own pause buttons on putting their homes on the market. New listings reached a record low for any August in Zillow records. The 7.3% month-over-month decline “is steeper” than normal for this time of year.
The slowdown caused overall inventory levels to shrink, falling 1.3% from their July peak.
At the same time, the labor market isn’t the impetus it once was, the report noted. “A weak labor market isn’t pushing a lot of new hires to move either,” Zillow said, adding that just 37% of sellers were influenced by a new job.
According to the report, the typical home value was $363,946 in August. But values climbed month-over-month in only two of the 50 largest metro areas. And even then, the increases were less than 1%.
Prices were flat in three markets and declined in the other 45. The largest fall off was 1.7% in San Jose.
On a year-to-year basis, though, values were down in just half the 50 metro areas, with the largest coming in Tampa at 6.5%. The largest annual gain was in Cleveland at 4.5%.
New listings, meanwhile, were down 3% compared to August 2024. But they were off 22.2% from pre-pandemic levels. Worse, the median age of houses for sale was 66 days.
As usual, there are some places that are more buyer-friendly than others. Markets where shifts in supply have impacted competition include such former hot spots as Miami, Tampa, Jacksonville and Austin, all of which have more listings now than prior to the onset of COVID.
At same time, Zillow found that it’s home city has made “a surprising transition” from favoring sellers to one supporting buyers. Inventory in Seattle is up 22% over the past 12 months.
On the flip side, supply constrained regions include the Northeast and the San Francisco Bay Area.
