Listings are up but new listings aren't - what that changes for buyers

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Listings are up but new listings aren't - what that changes for buyers

Steve Waller
Lender · Houston, TX · Member since 2026 · 72 posts · 11 votes

Something in the August data is worth separating out, because the headline number is misleading.

Active listings are up 3.6% year over year. New listings are down 0.1%. National inventory is still about 11% below pre-pandemic levels. So the growth in what you see on the market is not sellers arriving. It is buyers absorbing more slowly.

The supporting numbers point the same way. Contract signings are down 3.7% year over year. 20.4% of active listings carry a price reduction. Median time on market is 60 days.

The piece I think gets underweighted is the new-home side. Builders ended July with 9.6 months of supply. A builder sitting on standing inventory can buy down a buyer's rate, and a private seller generally cannot match that. In submarkets with real builder presence you are competing with an incentive budget, not just a list price.

Two practical consequences I have been working with:

1. The negotiation has moved to aged listings. A property at 60-plus days with a reduction already applied is a different conversation than a fresh listing, and the reduction tells you the seller has already adjusted once.

2. Underwrite the days, not just the price. If median time on market went from the low 50s to 60, that is carry you have to fund, and it lands in the same column that used to hold your margin.

Curious whether people are seeing the builder-incentive effect in their markets, or whether it is concentrated in the high-growth metros.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    1mo

    Steve, I think the biggest takeaway here is that more inventory doesn’t automatically mean more fresh opportunity. If active listings are rising while new listings are basically flat, buyers may simply be getting more time and more leverage on properties that have already been sitting.

    That changes how I'd look at the deal. A 60+ day listing with a prior price cut may give you more room to negotiate, but I'd still want to understand why it has been sitting. Sometimes it's just seller expectations catching up. Other times there's something in the property, financing, taxes, insurance, or CapEx that the market has already figured out.

    I also like your point about underwriting the days, not just the price. Every extra month of hold means more interest, taxes, insurance, utilities, and opportunity cost, especially on flips and value-add deals.

    From the tax side, those carrying costs matter too because the treatment can differ depending on whether the property is being held as a rental, developed, or flipped. Clean project-level accounting becomes important when the hold period stretches longer than expected.

    For investors looking at aged inventory, I’d probably focus less on “how much below ask can I get it?” and more on whether the new basis and financing actually create a good after-tax return.

    Feel free to DM me, I’d be happy to send over a few resources that might help with deal analysis and financing scenarios.

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  • Steve Waller
    OP
    Lender · Houston, TX · Member since 2026 · 72 posts · 11 votes
    4w

    Ashish - the "why has it been sitting" question turned out to have a cleaner answer than I expected when I went looking in my own market, and it is not property-specific.

    Houston's active count is essentially flat year over year - 38,947 in August, up half a percent - and months of supply has not moved at 5.3. What fell is closings: about 7,100, down 11.5%, with days on market at 54 against 52. So the aging is not new supply hitting a fixed buyer pool. It is the same pile of houses with fewer people walking through them, which means "this one sat" carries less information about the house than it used to.

    What decides whether a cut ever comes is the seller's own note. Per FHFA's National Mortgage Database, 78.8% of outstanding mortgages are under 6% and 51.5% are under 4%. On a $330,000 Houston house, $240,000 at 3.5% is $1,078 a month; rebuying the same house at 20% down and today's rate is about $1,705. A seller looking at a 58% payment increase is not catching up to the market at day 90 - he is waiting, and days on market never moves him.

    So I have started screening the seller instead of the days: estates, out-of-state owners, tired rentals, REO, and the 21.2% of mortgages now above 6%. Those are where a price actually moves.

    Where I would push back on myself: that makes the aged-listing-with-a-reduction signal weaker than I implied, since the cut may just be a seller who priced badly and still is not motivated. Do you underwrite the seller's likely equity position at all, or only the property?

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