Housing Supply Outpacing Demand

In 2024, the U.S. housing market experienced a drastic shift in supply and demand, where supply rapidly outpaced demand. According to real estate data provider Parcl Labs, inventory of homes for sale increased by 15% year-over-year through November, while sales dropped by 7%, resulting in a 22% gap between supply and demand. This imbalance led to more sellers cutting prices, with 37% of listings showing reductions compared with 35% the previous year.

Regionally, however, trends varied. Florida's housing market, particularly in Tampa and other major metros, saw supply-demand gaps exceeding 70%, with nearly half of all homes undergoing price cuts. Similarly, Texas markets faced above-average supply-demand gaps. Austin, for instance, managed its imbalance by stabilizing supply growth and aggressively lowering prices, offering a potential model for other high-growth markets to achieve balance.

Midwest Defied Gravity: Detroit (-8%), Chicago (-0.6%), and Cleveland (+1%) achieved rare negative or near-zero supply-demand gaps, driven by limited supply and resilient buyer demand. Modest price cuts around 33% of inventory supported steady price growth across the region.

Coastal Markets Show Enduring Strength: Mature coastal markets like New York (+11%), Boston (+9%), San Francisco (+10%), and Los Angeles (+15%) maintained tight supply-demand gaps and minimal price cuts throughout 2024. Supply constraints and willing buyers shielded these markets from broader turbulence. Read more