Today’s listing activity seems to jump compared to 2023, but the numbers aren’t properly comparing the broader historical context.

ORLANDO, Fla. – Stories have started to crop up about certain markets in Florida being a “buyers’ market,” where there is a glut of supply, and sellers are cutting prices and waiting a lot longer to get deals done. Reporters are looking at year-over-year increases in listings and changes in list and sale prices as the way to make these declarations. While market changes are certainly an interesting trend to take note of, particularly since active listings has been constrained significantly since mid-2020, this take can be somewhat misleading.

“Active listings” is defined as the number of properties active for sale at the end of the month. This number helps us understand not just how many properties go on the market, but also how quickly they go under contract, thus not active. For example, in 2008 the volumes of properties for sale outpaced the demand for homes, resulting in a high active-listing number until about 2014.

From mid-2020 to the end of 2021, Florida saw strong demand for homes. Despite stable monthly new listings, the high number of active buyers and rapid sales reduced inventory to its lowest levels in decades.

Meanwhile, builders rushed to increase housing supply through new construction but were met with labor and materials shortages and ultimately were unable to build enough to satisfy all this newfound demand. Strong demand coupled with a constrained level of inventory for new and existing homes made competition for homes so fierce that price escalated significantly during this time. It all goes back to that whole supply/demand relationship that impacts pricing – an idea that you may also remember from Economics 101.

The importance of correct comparisons

First, let’s understand how year-over-year percent changes (Y/Y % change) are calculated. When calculating Y/Y comparisons, simply take the number from this year, subtract the number from the same point in the previous year, then divide that number by the same point from the previous year, and multiply by 100. Or you can calculate year-over-year comparisons by subtracting last year’s number from this year’s number, divide by last year’s number, and then multiply that by 100.