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Inventory Growth Fueled by Softening Demand, Not More Sellers

While for-sale home inventory rose in March, fewer new listings have come onto the market in each of the past four months

- U.S. for-sale home inventory rose 1.2% -- the seventh consecutive month of gains.

- The number of new listings has fallen year-over-year in each of the past four months, indicating that the increase in the overall pool of for-sale inventory is due to cooling demand and homes remaining on the market for longer rather than an increasing share of homeowners deciding to list their properties.

- The typical U.S. home is worth $226,700. The 6.6% increase from last year is the smallest year-over-year appreciation in home values since August 2016.

- The median U.S. rent is $1,474. Rent prices grew 2.5% year-over-year, the fifth straight month of growth.

Apr 23, 2019

SEATTLE, April 23, 2019 /PRNewswire/ -- Despite an increase in the total pool of for-sale inventory, the number of new listings on the housing market has fallen year-over-year in each of the past four months, according to the March Zillow® Real Estate Market Reporti.

Overall inventory in the U.S. is 1.2% higher than in March 2018, but new listings fell 6.1% over the same period. And homes are staying on the market for longer – the median time on market increased four days in February from a year prior, the first such increase in four years and the largest since 2011. These trends indicate that the inventory growth is driven largely by cooling demand, not more home sellers.

"There is a narrative that inventory is growing, which favors buyers. But the how and why is important," said Zillow Director of Economic Research Skylar Olsen. "There may be more homes available for sale over the course of the month, but that's because more leftovers from previous months are sticking around. In truth, fewer homeowners are putting their homes on the market and buyer demand is falling back. Buyers won't have as much competition this shopping season and can take more time finding the perfect match, if it's out there."

The share of listings with a price cut is higher than this time a year ago in 33 of the nation's 35 largest housing markets. Price cuts are more prevalent in the most-expensive third of homes for sale, as 16.2% of top-tier homes have a price cut compared to 11.8% of bottom-tier homes.

National home values grew 6.6% year-over-year, and the median home is now worth $226,700. The rate of appreciation has slowed each month since peaking at 8% growth in December 2018.

Home values in San Jose, Calif., the most expensive of the 35 largest housing markets in the country, fell 0.2% from this time last year. This is the first time in four years that home values have depreciated on a year-over-year basis in any of the top 35 markets, and the first drop in San Jose in seven years.

Rent prices rose for the fifth straight month, up 2.5% on an annual basis. The median U.S. rent is $1,474. Rents grew fastest in Southwest markets Las Vegas (up 7.6%) and Phoenix (up 6.7%).

Mortgage rates listed on Zillow dropped sharply in March. Rates fell as low as 3.85% before ending the month at 4%, down twenty basis points from March 1. Zillow's real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.

Metropolitan Area

Zillow Home
Value Index,
March 2019

ZHVI
Quarter-
Over-
Quarter
Change

ZHVI Year-
over-Year
Change

Zillow Rent
Index,
March
2019

ZRI
Year-
over-
Year
Change

Inventory
Year-over-
Year
Change

United States

$226,700

1.0%

6.6%

$1,474

2.5%

1.2%

New York, NY

$442,000

1.1%

4.5%

$2,419

1.5%

4.8%

Los Angeles-Long Beach-Anaheim, CA

$652,200

-0.3%

2.0%

$2,836

3.4%

24.9%

Chicago, IL

$226,200

0.9%

3.3%

$1,691

3.2%

2.5%

Dallas-Fort Worth, TX

$245,100

1.8%

8.9%

$1,643

2.9%

15.6%

Philadelphia, PA

$234,200

0.9%

3.6%

$1,608

2.6%

-7.8%

Houston, TX

$206,600

1.0%

5.7%

$1,584

2.3%

7.3%

Washington, DC

$408,300

0.8%

2.7%

$2,173

1.9%

-28.5%

Miami-Fort Lauderdale, FL

$284,900

0.7%

6.1%

$1,923

3.1%

6.8%

Atlanta, GA

$220,000

1.5%

10.7%

$1,447

4.0%

13.8%

Boston, MA

$468,100

1.0%

4.7%

$2,395

2.1%

17.8%

San Francisco, CA

$949,500

-1.2%

2.0%

$3,450

1.6%

24.5%

Detroit, MI

$162,200

1.6%

7.8%

$1,226

2.3%

15.1%

Riverside, CA

$369,200

1.1%

4.9%

$1,988

5.8%

10.7%

Phoenix, AZ

$266,500

1.1%

6.6%

$1,446

6.7%

1.1%

Seattle, WA

$491,800

0.3%

2.6%

$2,233

2.2%

32.1%

Minneapolis-St Paul, MN

$270,300

1.2%

5.6%

$1,700

4.2%

-5.1%

San Diego, CA

$590,100

-0.6%

1.3%

$2,647

4.3%

20.4%

St. Louis, MO

$167,100

0.4%

5.0%

$1,158

1.8%

-8.1%

Tampa, FL

$214,300

0.8%

6.8%

$1,442

5.0%

8.5%

Baltimore, MD

$269,100

0.6%

2.8%

$1,753

1.0%

-15.5%

Denver, CO

$408,000

0.6%

3.7%

$2,108

3.2%

17.5%

Pittsburgh, PA

$144,400

0.2%

4.4%

$1,102

4.0%

-9.8%

Portland, OR

$397,900

0.5%

3.4%

$1,870

1.6%

11.6%

Charlotte, NC

$208,600

1.7%

9.4%

$1,342

3.9%

4.7%

Sacramento, CA

$412,100

0.9%

4.1%

$1,915

4.0%

3.2%

San Antonio, TX

$194,500

1.4%

6.3%

$1,368

2.3%

15.1%

Orlando, FL

$238,600

1.4%

8.0%

$1,531

6.5%

8.2%

Cincinnati, OH

$170,900

2.1%

8.7%

$1,305

2.4%

2.4%

Cleveland, OH

$146,900

1.0%

6.1%

$1,165

2.1%

N/A

Kansas City, MO

$193,600

1.5%

9.0%

$1,295

2.0%

-16.7%

Las Vegas, NV

$280,600

0.5%

10.0%

$1,396

7.6%

3.9%

Columbus, OH

$192,600

2.1%

8.0%

$1,363

3.5%

4.7%

Indianapolis, IN

$167,000

2.5%

12.8%

$1,235

3.0%

N/A

San Jose, CA

$1,209,700

-3.7%

-0.2%

$3,553

1.5%

44.9%

Austin, TX

$312,200

1.7%

6.4%

$1,704

1.7%

-1.0%

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 great real estate professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow Group's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists, data analysts, applied scientists and engineers 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. Launched in 2006, Zillow is owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.

Zillow is a registered trademark of Zillow, Inc.

i 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/research/data.

 

SOURCE Zillow

For further information: Alex Lacter, Zillow, press@zillow.com