Real Estate Spotlight: Is the Housing Market Finally Slowing? Part 2


By Gary A. Miller

I previously investigated several data points within the Triangle Multiple Listing Services (TMLS) to try to determine what evidence existed for a slowing of the housing market. The sense from most agents was that showings were down, bidding wars had cooled, and the market had generally calmed down from the height of the spring. The data from the prior article mostly supported that feeling.

In this article I will extend that exploration with a slightly more macro view involving a common statistic used to analyze the housing market: months of supply.

Months of supply is a relatively simple calculation that takes the number of homes listed and divides it by the number of homes sold in a given month. This calculation shows how long it would take to sell the current supply at the current pace at a given point in time.

The National Association of Realtors (NAR) says that historically six months of supply would indicate moderate price increases, whereas less than would indicate increasing prices and speed of sale due to lower supply than demand. That is to say, more than six months supply would be considered a buyer’s market and less than six months would be considered a seller’s market.

As seen on the chart below, the primary zip codes of southern Orange County (27510, 27514, 27516, and 27517) have been running below six months of inventory for approximately the past five years.

As you can also tell by that chart, the most recent 18 months has been particularly exaggerated in terms of inventory, with all four zip codes having one or fewer months of supply.

Zooming into a closer view of those 18 months on the chart below, we can see an upward trend of housing supply in the most recent months of 2022. However, we are still significantly below the point defined by NAR to tip over to a pure buyer’s market.

As noted in my previous article, we will need more data points before we can extrapolate a true trend. It has been five years since we had even one zip code above six months of inventory, and even longer for several zip codes to be in the buyer’s market range.

For now, we are still firmly in a seller’s market, at least as it is defined by months of housing supply. We may have slightly more supply than over the past year or so. But, the current data indicates we still have a sizable gap between supply and demand.

Gary A. Miller is co-owner of Red Bloom Realty.  He has lived and worked in Chapel Hill off and on since 1994 and is an avid musician, traveler, and former educator.

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