Real estate experts are observing a rise in active listings and a moderate correction in home prices in cities across the Gulf and West as the overall market continues to grapple with normalization following pandemic-era forces. However, despite these recent trends, demand for new construction hasn’t slowed in many of Florida’s hot markets.
To understand the drivers behind these trends in pandemic “boomtown” markets and to accurately predict growth in the back-half of 2025, it can be helpful to consider the relationship between housing demand and active home listings and how these trends have evolved since the pandemic.
Active listings continue to rise in many cities, and it’s very much related to demand and affordability constraints as well as pandemic-era dynamics.
Housing demand skyrocketed during the pandemic due to a combination of low interest rates, stimulus funding, and a temporary shift toward remote work. We saw an interesting period where many professionals could earn New York or San Francisco wages while residing in areas with significantly lower living expenses. As a result, active listings plummeted and home prices jumped nearly 44% between March of 2020 and June of 2022.
While it’s easy to think about active inventory exclusively as a way to measure supply, it can be helpful to view it as a proxy for the overall relationship between supply and demand. Housing demand changes frequently, and it can cause significant swings in inventory, which sometimes can show up many months later. During the pandemic, a spike in demand led to more home sales, which decreased inventory despite the fact that new listings remained consistent. During the peak of the housing boom (April 2022), the national inventory was -50% below 2019 inventory levels.
Today, we’re seeing quite the opposite. Nationally, active listings are on a multi-year rise. We saw demand shrink as mortgage rates began to spike after April 2022, while return-to-office mandates began to eliminate remote-work flexibility, and home prices added more affordability challenges. These factors are leading to an increase in active listings even while new listings are falling at the same time. The inventory rise stalled a bit in 2023 after many hot markets stabilized, but the slump didn’t last long.
As of today, we’ve reached an 18-month streak of year-over-year increases in active listings. Naturally, markets where inventory has risen the most have seen the highest levels of weakening when it comes to home prices. As supply continues to grow, buyers gain more leverage, and it’s interesting to watch how this is playing out across the country.
We’re seeing a big chunk of the Northeast and Midwest sit below pre-pandemic inventory levels while the West and Gulf have seen larger increases, and as a result, signs of a potential buyer’s market are starting to emerge. These are also the markets that experienced the largest price booms during the pandemic and saw the most new construction. As new builds drive up inventory, it also has a cooling impact on the resale market. Additionally, as market softening sets in, some builders are willing to reduce prices to keep up with demand for new construction.
Years later, we’re still seeing the housing market undergo a period of normalization. Listings are rising and putting some Gulf markets into correction mode, and home price growth is decelerating. Nevertheless, there is still significant demand for new home construction in many top markets, including Florida. As buyers shift their focus away from existing listings and toward new homes where there are deals available, homebuilders across the state have a full pipeline.
To help meet the demand, Jobalia Development Group continues to build the infrastructure needed to help our partners keep up with demand for new construction across Florida. By transforming raw land into new communities with hundreds of ready-to-build lots, we enable our partners to accelerate their new construction pipelines.
