The detached housing market has come back to life, although only for certain price segments. If we look at the detached housing market as a whole, sales were up 52% from last year. However, last February marked the worst year for detached sales in over 20 years. In other words, it was a very easy comp to beat. Detached sales remain a fraction of what they used to be, coming in well below their ten average for the month of February.
Meanwhile, inventory continues to fall as new listings remain perplexingly below normal. Inventory levels dropped 26% below February 2019 levels. It’s not hard to figure out what happens when sales increase and inventory for sale decreases. Here we can see the MLS benchmark price continue to drift closer towards positive territory, although officially down 0.7% from last year.
Again, it is important to distinguish that this has flipped back to a local market that is price sensitive. The luxury market remains soft. For example, there is 12 months of supply for detached homes above $2M and just 3.6 months of supply for detached homes below $1.5M. Price point is extremely important. Basically locals are competing over the dwindling supply of affordable houses available for sale, while the high end of the market remains starved for buyers, particularly since the offshore bid left several years ago.
Overall, the detached market looks stable for houses under $1.5M, with just under four months of supply available. We do expect new listings to ramp higher in the upcoming spring market.