The temperatures are rising, the sun sets later, and the daffodils have begun to show their green leaves from the earth. Spring is on its way. Just like the bears that are beginning to wake up after long winter naps; homebuyers and sellers are also starting to emerge from hibernation…or at least they usually do.
Pre-pandemic, the first week in February is the lowest point for housing inventory nationwide. This is because sellers return to the market in spring. However, this predictable trend has been disrupted by the pandemic.
Todd Alperin, a Better Homes and Gardens Real Estate The Masiello Group agent based out of Southern New Hampshire, stated that “The pandemic definitely affected the real estate market.” “We had low inventory prior to the pandemic, and the pandemic increased the inventory shortage, which has created major problems for the real estate market.”
Mike Simonsen, president of Altos Research, said that it is not common to see housing inventory drop throughout February like it did this year.
Simonsen stated in his February 13 housing market update that inventory rose in February prior to the COVID-19 pandemic. Spring home sellers had begun listing their homes, and buyers weren’t yet out of force. “But, in 2020-2022, buyers came out quickly and inventory didn’t hit its bottom until much later in spring.”
After hitting a two-year high of 577,172 homes, the 7-day average for inventory in housing has been declining nationally since October. According to Altos, this is after hitting a 2-year high of 577,172 properties on the market. The 7-day inventory average was 429,757 as of February 24, 2023. Close observers don’t expect much change in the coming weeks.
Simonsen stated that inventory is dropping quickly, which is a surprise. “My expectation is that rates will rise in the sixes and sevens for a few more years. Over that time we will get a little more inventory each year, and then we’ll return to normal.”
Logan Mohtashami, HousingWire’s lead analyst, said that inventory has been steadily falling for almost ten years. This is because people get houses with fixed rate mortgages and their income tends to increase over time, but their shelter costs remain the same. So it becomes a really good deal. Although inventory is higher than last year, we are still working from all-time lows. If mortgage rates remain high enough and homes take longer time to sell, then inventory will increase.
What happened to “normal”?
Many agents felt that the market was nearing “normal” in the late fall of 2022 as buyers struggled with double-digit mortgage rates within a matter of months.
“My team, I are seeing more normal activity in the market,” Kent Redding (an Austin, Texas-based Berkshire Hathaway Home Services Agent) told RealTrends on November.
Redding said that market conditions have not returned to the normal he had hoped for, even though they are still below the frenetic pace in which the 2021 and early-2022 housing markets were moving at.
Redding stated that although we are seeing modest price increases, the buyers are still under pressure. “Personally, I am busy getting sellers ready for March and April in my business. It is easier because sellers are beginning understand that what we had previously was abnormal and now things are beginning to look more normal in terms of price increases and days on the market.”
Redding stated that although he expects inventory to pick-up in March and April, he still expects there will be approximately 8,500 homes on market. This is below the October 2022 peak, which was roughly 10,000 homes.

My expectation is that rates will rise in the sixes and sevens for a while, but that we will get more inventory each year, and then we’ll return to normal.
Mike Simonsen, president at Altos Research
Alperin, in Southern New Hampshire is anticipating similar trends.
“I don’t think we’re going to see a large increase in inventory any time soon but I think we’ll see some additional homes on the market in the next few weeks as would normally happen in spring,” said Alperin.
According to Alperin, the timing of the increase in housing inventory seems to be following pre-pandemic normal seasonal patterns. The uptick in housing inventory is not as large as it would normally be. This trend is expected to continue throughout the year.
Alperin stated that she doesn’t expect a lot of inventory to come on the market as potential sellers are having second thoughts about listing. “So many people refinanced mortgages when the mortgage rates were between 2% and 3%. They don’t want the lower interest rate to be lost by moving to another property. The low inventory keeps other sellers off the sidelines, as they worry about where they will end up if they sell.
Alperin stated that the spring selling season arrives at a normal time. However, other aspects of the Southern New Hampshire market are also returning to normal, including a slower appreciation of homes and fewer bidding battles.
He said, “It all depends on the community and price range, but we’re not seeing things go drastically over asking when there’s a bidding war anymore.” “It is only $10,000 to $15,000 at the most.”
Megan Fox, a Compass agent, said that this is not the case in her market.
Fox stated that they are still receiving multiple offers and open houses are being canceled frequently because they are receiving multiple offers within the first few day. “I feel almost like we have more problems right now than we did in 2021 or early 2022. There is not enough inventory and there are still a lot buyers relative to the inventory in our area. Everyone is competing for the same few homes.
Fox announced that a home in her metro area was on the market earlier in February. Fox received 18 offers within days and the home ended up selling for $150,000 more than she asked.
Fox stated, “You are still seeing these really big jumps over asking.”
The data back up her experience. John Burns Real Estate Consulting reports that 41% of Northeast resale listings received multiple bids in January.
Altos Research data shows that the 90-day median Bergen County list price has been rising since February 2022. It rose from $639,000 in February 2022 to $799,000 by February 24, 2023. Inventory has been steadily declining since September 2022, with an average of 1414 homes being on the market for 90 days and a total of 777 homes as of February 24, 2023.

Because many potential sellers are considering selling, I don’t expect a lot of inventory to be on the market. Many people refinanced mortgages when mortgage rates were between 2% and 3%. They don’t want the lower interest rate to be lost by moving to another property.
Todd Alperin is a Better Homes and Gardens Real Estate agent with The Masiello Group
Fox is optimistic that things will improve despite the difficult conditions.
She stated that “pre-pandemic, the spring market was our largest and I believe we will see a stronger spring market this year.” “I do see people preparing to put their homes on the market right now, and we encourage all prospective sellers to make an offer.
Mike Martirena, a Miami Compass agent, also deals with low inventory. However, he has not seen bidding battles, especially one like Fox, since the peak of the market in 2021/early 2022.
He said that prices are still fairly stable. “They have fallen maybe a percentage or two from their peak, but I expect them remain pretty stable this fiscal year.”
How can we get back to “normal”?
Although not all metros are experiencing huge bidding wars that drive home prices higher, they are still high and agents are suffering from a lack of supply.
Fox stated that inventories are preventing the market from returning to pre-pandemic levels.
Some agents are worried that this could lead to more aggressive Federal Reserve action. However, Mohtashami believes the Fed should be taking a different approach.
Mohtashami stated that the Fed had talked about a housing reset but that monetary policy cannot be based on home prices alone. The Federal Reserve stated that they want to keep rates at a certain level, and that they should stick to it. If the economy gets weaker, then bond yield will catch up to them. The Federal Reserve wants to increase rates, but they should just wait and see what happens. They shouldn’t panic about any positive or negative movement, but they should keep their cool and wait to see what happens when the labor market stabilizes. The Fed rate hike story is over.

The market is being held back by inventory, which prevents it from returning to pre-pandemic levels.
Megan Fox, Compass agent
Alperin, who is based in Southern New Hampshire keeps a close watch on the Fed’s interest rate plans and policies.
Alperin stated that the Fed has been extremely aggressive in raising interest rates. “We are now seeing interest rates that have almost doubled in less 12 months, but the supply of houses has not come back.” With such little inventory, I believe something needs to be done to restore the balance.

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