The total number of active listings without a contract has just exceeded 20,000, across all areas and types, excluding UCB and CCBS listings. This is the first time we have broken through the 20,000 barrier since March 2017. However 20,000 is still below the long term average , which is around 25,000.

While it is true we no longer have a supply shortage, we do not have an excess of supply either, at least when we examine the market as a whole. Things get a bit more complicated when we look at counts by price range.

In certain price ranges, supply can appear very high compared to the long term average. For example:

• for single-family detached homes priced between $350,000 and $400,000 we have 2,082 active listings. This is the highest count since January 2008.
• for single-family detached homes priced between $400,000 and $500,000 we have 4,456 active listings. This is the highest count we have ever seen.
• for single-family detached homes priced between $500,000 and $600,000 we have 2,510 active listings. This is the highest count since December 2007.

You might be thinking - wow - those are high active counts if they are setting new records like that, especially for the $400,000 to $500,000 segment. But this is because $400,000 to $500,000 is the new normal. The median sales price falls in this range and closed listings are also relative high for this price range compared to the long-term average.

The key is to look at the how the active inventory count compares with the current sales rate:

• $350,000 to $400,000 we have 3.3 months of supply at the current monthly sales rate and 75 days of inventory at the current annual sales rate
• $400,000 to $500,000 we have 3.8 months of supply at the current monthly sales rate and 87 days of inventory at the current annual sales rate
• $500,000 to $600,000 we have 3.7 months of supply at the current monthly sales rate and 90 days of inventory at the current annual sales rate

These supply statistics are high compared to the last several years, but not even above average from a long term perspective.

With interest rates still moving upwards, things could certainly get worse from here, but we should not misunderstand the situation right now. These price ranges are looking very normal from a supply versus demand perspective. We will see prices fall for sellers who hold a weak hand or are impatient, and because sentiment is poor after such a positive 2 years. But this is not what a crash look like.

It is what a correction looks like and it would not be at all surprising if prices in December 2022 look similar to those in December 2021.

Market insights provided by the Cromford Report.