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Low Inventory Limits Options for Home Buyers Across the Country

Home values continued to climb in January, driven in part by low inventory of homes for sale.

- The supply of homes for sale in the U.S. is 8.6 percent below its level a year ago.

- Markets in the West tend to favor sellers, while buyers have more negotiating power in the East.

- National home values rose 4.2 percent to $184,000, according to the January Real Estate Market Reports. Rents rose 2.9 percent to $1,381.

Feb 23, 2016

SEATTLE, Feb. 23, 2016 /PRNewswire/ -- As the home shopping season approaches, lack of inventory continues to limit choices available to potential buyers, putting a strain on markets across the country.

Home shoppers had 8.6 percent fewer homesi to choose from than they did last year, according to the January Zillow® Real Estate Market Reportsii. Housing starts reached a three-month lowiii in January, indicating that newly built homes will not be a significant benefit for buyers, either.

A restricted supply of homes for sale will mean increased competition for homes that are available, and bidding wars that can price out entry-level or first-time buyers. Low inventory, along with a strong job market has been driving up home prices, especially on the West Coast.

Across the country, only a quarter of markets saw inventory increase over the past year. Among the largest metros in the U.S., Atlanta saw the largest increase in available homes for sale – 6.8 percent. Home shoppers in San Diego have significantly fewer options – inventory there has dropped 30 percent.

Besides inventory, Zillow looks at price cuts and days on market to help identify whether markets are better for buyers or sellers. According to Zillow's latest Buyer/Seller analysisiv, markets that benefit sellers are mostly grouped in the West, where buyers are more likely to face bidding wars. Buyers will find themselves with more bargaining power in the East, in markets like Philadelphia and Baltimore.

 

Top 10 Sellers' Markets

Top  10 Buyers' Markets

1.

San Jose, Calif.

1.

Philadelphia, Pa.

2.

San Francisco, Calif.

2.

Chicago, Ill.

3.

Denver, Colo.

3.

Baltimore, Md.

4.

Seattle, Wash.

4.

Hartford, Conn.

5.

Nashville, Tenn.

5.

New York/Northern New Jersey

6.

Portland, Ore.

6.

Miami, Fla.

7.

Sacramento, Calif.

7.

Indianapolis, Ind.

8.

Raleigh, N.C.

8.

Jacksonville, Fla.

9.

Salt Lake City, Utah

9.

Virginia Beach, Va.

10.

San Diego, Calif.

10.

Orlando, Fla.

 

"If you're looking for a home or trying to sell, it's important to know what kind of market you're in," said Zillow Chief Economist Dr. Svenja Gudell. "Hopeful buyers in a strong sellers' market should be prepared to move quickly, since homes don't stay on the market as long. In a buyers' market, they can afford to take their time and be more selective. However, low inventory is a factor affecting the majority of the country, so buyers should be prepared for a limited selection as we enter the home buying season."

National home values rose 4.2 percent to a Zillow Home Value Indexv of $184,000. The pace of home value appreciation has increased for ten straight months. Denver and Dallas continue to lead the way, with strong double-digit increases in home values.

Rents, on the other hand, continued their recent trend of leveling off, growing 2.9 percent from last January. San Francisco was the only large metro to see double-digit rent increases.

 

Metropolitan Area

 January 2016 Zillow Home Value Index (ZHVI)

ZHVI Change January 2015-January 2016

Zillow Rent Indexvi Change January 2015- January 2016

Inventory Change January 2015-January 2016

United States

$184,000

4.2%

2.9%

-8.6%

New York/Northern New Jersey

$382,400

2.1%

4.9%

-1.1%

Los Angeles-Long Beach-Anaheim, CA

$559,000

6.5%

3.9%

-14.8%

Chicago, IL

$193,200

2.9%

0.4%

-3.0%

Dallas-Fort Worth, TX

$179,000

14.2%

4.3%

-14.5%

Philadelphia, PA

$203,400

1.4%

1.8%

-3.5%

Houston, TX

$170,300

7.1%

4.4%

4.0%

Washington, DC

$358,000

0.6%

0.9%

0.3%

Miami-Fort Lauderdale, FL

$227,200

10.5%

4.2%

-15.1%

Atlanta, GA

$161,600

6.6%

3.5%

6.8%

Boston, MA

$384,500

5.9%

6.0%

-4.7%

San Francisco, CA

$790,700

12.0%

11.4%

-5.2%

Detroit, MI

$121,900

6.0%

2.0%

-1.7%

Riverside, CA

$298,900

5.9%

3.2%

-8.3%

Phoenix, AZ

$217,400

8.2%

3.6%

-14.8%

Seattle, WA

$371,100

9.5%

7.2%

-27.1%

Minneapolis-St Paul, MN

$217,800

4.7%

1.6%

-4.1%

San Diego, CA

$502,500

6.5%

3.7%

-30.2%

St. Louis, MO

$141,500

6.7%

1.2%

-10.7%

Tampa, FL

$161,700

9.0%

4.0%

-18.6%

Baltimore, MD

$243,500

1.3%

0.8%

-3.8%

Denver, CO

$324,500

15.4%

8.0%

-9.3%

Pittsburgh, PA

$126,000

1.3%

0.9%

1.7%

Portland, OR

$312,700

12.8%

9.2%

-26.2%

Charlotte, NC

$158,600

5.3%

2.9%

-29.0%

Sacramento, CA

$334,400

8.4%

4.4%

-14.4%

San Antonio, TX

$148,300

6.3%

2.9%

-16.2%

Orlando, FL

$181,500

7.2%

4.2%

-11.6%

Cincinnati, OH

$142,700

4.0%

2.4%

-15.0%

Cleveland, OH

$124,700

2.2%

-0.6%

-2.3%

Kansas City, MO

$147,100

5.7%

3.5%

-7.5%

Las Vegas, NV

$200,400

8.6%

1.5%

-6.5%

Columbus, OH

$151,500

5.0%

2.8%

-14.9%

Indianapolis, IN

$130,600

3.8%

0.5%

-13.1%

San Jose, CA

$940,000

12.9%

8.3%

-1.1%

Austin, TX

$244,000

9.3%

3.5%

-1.2%

 

About Zillow

Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i Each week, a count of the number of single-family, condominium and cooperative housing units listed for sale on Zillow is taken. The median of these values within a month is calculated as the monthly value. Because inventory can be seasonal, a seasonally adjusted value is reported using a standard STL procedure. This seasonally adjusted series is then smoothed using a three-month rolling average.
ii The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.
iii http://www.bloomberg.com/news/articles/2016-02-17/housing-starts-in-u-s-decline-to-lowest-level-in-three-months 
iv Zillow's Buyer/Seller Analysis ranked data on the number of days listings spent on Zillow and the percentage of homes on the market with a price cut, and ranked the 50 largest metro areas in the country to determine whether buyers or sellers have more negotiating power in a given market.
v The Zillow Home Value Index (ZHVI) is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
vi The Zillow Rent Index is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars.

 

SOURCE Zillow

For further information: Lauren Braun, Zillow, press@zillow.com


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