June’s Data Reveals That the Housing Market’s Correction Has Begun

Since the start of this year, many famous housing market experts have been predicting that there would be a significant change in the housing market in 2022.

Over the course of the last two years, the real estate market has been uneven and tilted heavily in favor of sellers. It is common practice to engage in bidding wars, make offers higher than the asking price, and forgo any conditions. However, purchasers are regaining some of their influence in the housing market due to rising interest rates, a drop in accessibility, and the growing threat of a recession. 

The market’s fundamentals are expected to evolve, resulting in a significant slowing of growth rates, which might even become unfavorable. However, the property market is very specialized, and I think that the situation that will most likely play out over the next several months is one in which certain regions will see a fall while other markets will continue to rise, although at a much more controlled rate than in the previous few years.

The question that comes next is, which areas have a potential for price declines, and which markets will see prices remain stable or perhaps increase. In this piece, I will analyze data to assess the short-term health of different real estate markets throughout the United States. This analysis will assist you in recognizing opportunities and making smart decisions on investments.

In-Depth Analysis

In order to better understand regional variations, let’s first look at national housing market statistics from June of this year.

To start, the things that matter most, like pricing and appreciation rates, haven’t changed all that much as of yet. The annual increase in the median price of a property for the week that ended July 3 was still around 12.5 percent. This amount of growth would be unmatched in any pre-pandemic era, although this figure represents a decrease from the previous summer’s high when appreciation rates were about 20 percent.

Even while prices have not yet decreased nationally, it is essential to note that year-over-year price reductions have increased by about 4 percent and are now at a much greater level than ever since at least 2019.

A short remark about pricing decreases: They are worth keeping an eye on, but I don’t place too much stock in this data point. Price decreases are often caused by aggressive selling activity rather than a lack of demand for the product. After two years of exceptional selling strength, I would anticipate a rise in price reductions across practically all markets, even the powerful ones. I am concerned when I observe significant price decreases (the year-over-year rate of price decreases in Austin, Texas, has increased by about 500 percent), but I am not as concerned when I see rises in the double digits.

A decline in prices might act as a leading signal for movements in the market; nonetheless, this indicator should be studied in conjunction with other signs.

Both the number of active listings and the number of days on the market (DOM) need to grow for home values to either level off or fall, as I’ve said in previous writings of mine. This is the primary change in trend that has to take place in order for housing prices to stabilize or decline. You can read the whole discussion of why I think this here, but in a nutshell, active listings and days on the marketplace are excellent metrics of the equilibrium between supply and demand in the housing market. When there is a limited inventory and days on the market, the market is considered to be in the seller’s favor, and prices often increase. Buyers gain leverage when inventories and days on the market (DOM) grow, resulting in either stable or falling prices.

According to the data that Realtor.com offered, active listings are beginning to rise on a national level and have increased by almost 19 percent compared to June 2021. To be clear, the number of active postings is still far lower than before the epidemic. However, we are no longer in the period of falling inventory (as compared to the previous year), which lasted from April 2020 to May 2022 inclusively.

On the other hand, the number of days a home spends on the market (DOM) is still very close to an all-time low and is around fifty percent of what it was in 2019. This indicates that demand for homes is still rather high nationwide. If there had been a decline in demand, listings would have been on the market for longer, but this is not the situat

It is crucial to highlight that in both figures, part of the recent rises may be due to seasonality. You will observe that the number of active listings and the DOM tend to increase during the summer and decrease during the winter; you will need to consider this. We will consider DOM successful once it has shown year-over-year growth, which has not occurred as of yet.

The real estate market seems to be beginning to change, however little, on a national basis, but the move is likely to be slow. The days on the market (DOM) continue to be low, indicating ample demand; as a result, prices continue to be up an astounding 12.5 percent year-over-year. The days on the market (DOM) and the number of active listings need to go considerably closer to the levels they were before the epidemic, but we are not even close to reaching that point now.

Therefore, why do I assume that the property correction has already begun? Looking at the statistics for certain home markets, you may get a far more detailed picture of the situation.

Real Estate markets in Different Regions

People in this business often say that real estate is local. The most recent statistics on the housing market make this point quite clear.

To demonstrate the variations, let us look at some of the most successful companies to emerge from the most recent economic upturn: Boise, ID, and Asheville, NC.

Prices in the Boise home market increased by 59 percent between June 2019 and June 2022, making it one of the hottest property markets in the country during the last few years. Those are astounding increases, but Boise seems to be in danger of giving up some of those gains in the near future.

You should keep in mind that my premise is that the marketplaces at the most serious danger of experiencing a correction are the ones in which the number of active listings and the number of days on the market are close to the levels that existed before the epidemic. Active postings in Boise increased by 130 percent year-over-year and are now 8 percent higher than before the epidemic (which I calculate as June 2019 compared to June 2022)! There are quite a few markets in which this is the case, but Boise stands out among them all.

The DOM is now at a level that is 13% lower than it was before the epidemic, despite a year-over-year increase of 4%. But when you combine those two data points with a significant rise in the number of new listings and a significant rise in the number of price decreases, it seems to me that the housing market is undergoing some kind of change.

Does this suggest that there will be a significant decrease in costs in the Boise area? No. That is potential, but I believe a well-balanced market in which purchasers retain some degree of influence is more likely to occur. Even though this is just a smart estimate on my part, I do anticipate that we will see pricing decreases in Boise at some time in the next year or two, but I predict that any price decreases will likely just be in the single digits. I believe that purchasers will be able to negotiate, and as a result, better prices will become offered in areas such as Boise. This is something that I believe to be more definite.

In order to compare and contrast Boise with another recent boom town, let’s take a look at Asheville, which is located in the state of North Carolina.

More slowly than Boise, but still enormously, Asheville’s revaluation since the beginning of 2019 was 41% and has risen by over 20% in the last year.

But when we look at the leading indicators for Asheville, we see a very different narrative than we do for Boise. The number of active listings has decreased by 11 percent as compared to the same time last year. The number of days a home spends on the market has decreased by 8% year-over-year, while price reductions have increased by just 18% year-over-year. This indicates that the housing market is very solid, and it is doubtful that prices will see a significant shift in the near future. The power in this situation is with the dealers.

Looking at these two case studies, it is clear that various housing markets are moving differently. For this explanation, I chose two popular and well-known hot marketplaces; nonetheless, you will find that similar variations are prevalent everywhere. Reno, Austin, and Phoenix give off the impression that they are transitioning. However, Miami, Richmond, and Tallahassee still give the impression that they are strong seller marketplaces.


The property market is still performing very well on a nationwide scale. Prices have increased by double digits compared to the previous year, inventory is beginning to move up, but the number of days a property spends on the market continues to be extremely low.

However, if you know how to read between the lines and take a close look at a number of trustworthy lead factors for the property market, you can see how it is experiencing change. The market is shifting away from the iron grip that sellers have had on it, and the power is changing back to the consumers. Buyers of homes and investors in real estate are in a good situation to negotiate and discover deals.

These changes in tendencies are even more obvious when seen from a more regional perspective. Some markets seem to be rather robust and are likely to continue expanding (although at a more moderate rate), while others appear to be on the verge of seeing price corrections in the coming weeks. You must understand the market in your area if you want to be a smart investor. The number of days a property has been on the market, in addition to the number of current listings (or other inventory metrics), is the data that I consider to be of the utmost importance. You can find those in your location by searching Google, or you can download my spreadsheet and use it to compare the statistics for June 2022 to those for June 2021 and June 2019 for hundreds of different marketplaces.

It is important to keep in mind that the statistics I will be discussing here serve as leading indications of the short-term prospects of the city under consideration. You must study macroeconomic indicators like population increase, income growth, and construction to understand the long-term picture.