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Supply’s Slipping Away, and It’s About to Pinch Main Street

New listings just fell off a cliff, down 1.7% year‑over‑year for the four weeks ending December 7.
That’s the sharpest drop in more than two years. Feels a bit like 2022 again, minus the panic and bidding wars. But if you’re hunting a new storefront, warehouse lease, or small commercial deal, consider this your early warning.

Inventory growth’s basically stalled, up only 5.1% from last November, the weakest gain in nearly two years. Sales barely nudged higher (+1.2%), led by the Midwest and South. Median home price: about $440K, up 1.3%.
The one bright spot? Starter homes under $300K , sales up 4.9%, inventory up to a nine‑year October high. Translation: the low end’s still moving, everything else feels like molasses.

Here’s what that means for operators on the ground:

  • Tighter supply = thinner opportunity. Less inventory means fewer half‑decent spaces hitting the market. If you need a site or housing unit, shop early and move fast.
  • Regional split’s widening. Northeast and Midwest, inventory still lean, especially in places like New Jersey and Illinois where listings are down 50% from pre‑pandemic peaks. Sun Belt markets? Different story. Florida, parts of Texas, and Carolinas are seeing supply stack up, cooling prices ~5% year‑over‑year.
  • Cash flow > speculation. Rising competition and sticky prices mean predictable leases beat chasing “the next hot area.” Rental stability and modest appreciation are the real wins right now.

If mortgage rates drift toward 6%, the lock‑in effect breaks, and an estimated 5.5 million sidelined households hit the market. That’s when things get weird again.
Until then, supply wins the war, and we’re short on ammo.

Keep an eye on the December 29 pending‑sales report. That’s your true compass.

Bottom line: this isn’t a crash; it’s just the market tightening its belt. If you spot a property that works operationally, lock it before spring buyers show up. Predictability’s the rarest asset on Main Street right now, and yes, that includes Fridays without problems.

— Main Street HQ