Where the housing market shift is happening the fastest right now

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When assessing home price momentum, it’s important to monitor active listings and months of supply. If active listings start to rapidly increase as homes remain on the market for longer periods, it may indicate potential future pricing weakness. Conversely, a rapid decline in active listings could suggest a market that is heating up.

National active listings are on the rise (up 24.6% between January 2024 and January 2025). This indicates that homebuyers have gained some leverage in many parts of the country over the past year, with some markets even feeling like balanced or buyers’ markets on the ground.

However, nationally, we’re still below pre-pandemic active inventory levels (25.3% below January 2019), and some resale markets still remain tight—but, that’s not the case anymore in many pockets of the Sun Belt and Mountain West.

Here’s how the total January inventory/active listings (according to Realtor.com) compare to recent historic levels:

January 2017: 1,154,120

January 2018: 1,043,951

January 2019: 1,110,636

January 2020: 951,675

January 2021: 531,775

January 2022: 376,970

January 2023: 616,865

January 2024: 665,569

January 2025: 829,376

Click here to view an interactive version of the map below.

Among the states with the biggest inventory jumps is Florida. As ResiClub well documented: In Florida, the biggest inventory increases initially over the past two years were concentrated in sections of Southwest Florida. In particular, in markets like Cape Coral, Punta Gorda, and Fort Myers, which were hard-hit by Hurricane Ian in September 2022. This combination of increased housing supply for sale—the damaged homes coming up for sale—coupled with strained demand—the result of spiked home prices, spiked mortgage rates, higher insurance premiums, and higher HOAs—translated into market softening across much of Southwest Florida.

However, the inventory increases in Florida now expands far beyond Southwest Florida. Markets like Jacksonville and Orlando are also above pre-pandemic levels, as are many coastal pockets along Florida’s Atlantic Ocean side.

One reason being that Florida’s condo market is dealing with the after effects of regulation passed following the Surfside condo collapse in 2021. This is compounded by a slowdown in work-from-home migration to Florida and significant home insurance shocks.

Click here to view an interactive version of the map below.

In December 2024, nine states were back above pre-pandemic inventory levels: Arizona, Colorado, Florida, Idaho, Oklahoma, Tennessee, Texas, Utah, and Washington.

In January 2025, just three states are above pre-pandemic levels: Colorado, Florida, and Texas.

But the reason the figure shrank isn’t that inventory growth (after accounting for seasonality) has stalled. Instead, it’s due to a denominator effect—since inventory shrank over the course of 2019, January 2019 had a higher comparable denominator, while December 2019 had a lower one.

Why are Sun Belt and Mountain West markets seeing a faster return to pre-pandemic inventory levels than many Midwest and Northeast markets?

One factor is that some pockets of the Sun Belt and Mountain West experienced even greater home price growth during the pandemic housing boom, which stretched costs too far beyond local incomes. Once pandemic-fueled migration slowed, and rates spiked, it became an issue in places like Colorado Springs and Austin.

Unlike many Sun Belt housing markets, many Northeast and Midwest markets have lower levels of homebuilding. As new supply becomes available in Southwest and Southeast markets, and builders use affordability adjustments like buydowns to move it, it has created a cooling effect in the resale market. The Northeast and Midwest don’t have that same level of new supply, so resale/existing homes are pretty much the only game in town.

Big picture: Over the past few years we’ve observed a softening across many housing markets as strained affordability tempers the fervor of a market that was unsustainably hot during the Pandemic Housing Boom. While home prices are falling in some areas around the Gulf, most regional housing markets are still seeing positive year-over-year home price growth. The big question going forward is whether active inventory and months of supply will continue to rise and cause more housing markets to see outright price declines.

Generally speaking, local housing markets where active inventory has returned to pre-pandemic levels have experienced softer home price growth (or outright price declines) over the past three years. Conversely, local housing markets where active inventory remains far below pre-pandemic levels have, generally speaking, experienced stronger home price growth over the past three years.

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