US listing shortage boosting pricesThe number of homes available for sale across America has fallen – but it may be a good thing, says top property website Zillow.
In the first week in June total listings on Zillow fell 12.2% year-over-year, but the shortage is helping to push up prices to 5% or more a year.
The crunch is less severe than it was at the beginning of 2013 and there are 5.3% more homes for sale on Zillow in early June than in January.
Overall, year-over-year inventory levels improved in June compared to January in 70 metros and the nation as a whole.
In the 30 largest metro areas covered by Zillow, those with the best year-over-year increases from January and June are Phoenix, up 31.9%, San Diego, up 14.9% and Minneapolis, up 13.5%.
Sales listing shortages worsened from January and June in 29 metro areas and in 11 of the top 30 largest metros. The worst performers include Las Vegas, down 21.8%, Chicago, down 12.3% and Washington, DC, down 9.8%.
Zillow Chief Economist Dr Stan Humphries says, “As the recovery has progressed, inventory constraints have played a major role in rapidly pushing up home values in many areas, as increasing demand for homes ran headlong into limited supply.
“It has always been just a matter of time before more supply came on the market to meet this demand, as homebuilders built more new homes, and sellers entered the market to capitalize on recent robust appreciation in their own homes.”
“Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing. But a corner has been turned.
“Going forward, as this new supply makes its way to market, we expect the pace of home value appreciation to slow down from unsustainably high annual levels of five per cent or above to more moderate levels closer to historic norms of three per cent or four per cent.”
Nationwide, the greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier and middle-tier properties each falling 15.7% year-over-year.
The number of bottom-tier properties for sale on Zillow nationwide fell only 2.5% in early June compared to June 2012.