Zillow analysts are diving into the data to examine just how much the housing market has slowed compared to the pandemic peak we experienced just months ago. While prices have begun to fall, a recent Zillow reports puts the cause on an extreme drop in active demand—as measured by the number of people actively shopping for a home—as opposed to an increase in supply.
Nationally, Zillow finds that demand is down 30 percent annually, with even larger declines out West.
In the Los Angeles/Long Beach/Anaheim area, active demand is down some 44 percent as of September 2022. Demand peaked in the L.A. area in May of 2021, with a 167 percent annual increase in homebuyer interest.
San Diego has been demand fall 44.5 percent year-over-year. At its pandemic peak, demand was up 112 percent in May 2021.
In Riverside, demand fell 48 percent in September 2022 compared to a year earlier, while demand was down nearly 41 percent in Bakersfield.
Up north, the news doesn’t get much better. Demand in San Francisco was down 38.4 percent last month compared to a year earlier—and way below May 2021 when demand rose more than 180 percent.
San Jose, which saw one of the largest increases in homebuyer demand in the state during the past two years has tumbled over the recent months, with buyer demand now down 44.6 percent.
And while Sacramento’s homebuyer demand is still below last year’s figures, the area has actually experienced an uptick in recent months. In July of this year, demand fell 45.8 percent annually, but has now bumped back up to just 30.9 percent below September 2022.
Zillow estimates that new for-sale listings were down 16 percent nationally in September compared to a year prior—a similar annual shortfall that was seen in August and in July.