Fewer For Sale signs means less competition for selling homeowners who want to enter the housing market at the start of 2020. A new report from realtor.com® shows that housing inventories are at their lowest level since January 2018. Housing shortages haven’t appeared to cool home buyers’ desire to buy.
Price growth is accelerating faster than national averages in markets with the largest inventory declines, realtor.com® reports. Inventory across the country fell by 12% year over year in December. The median list price was $299,950, up 3% compared to a year ago.
“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30 years of age in 2020, a prime age for many to purchase their first home,” says George Ratiu, realtor.com®’s senior economist. “The significant inventory drop we saw in December is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”
Housing inventory shortages are accelerating across price points too, including the luxury market, realtor.com®’s report notes. In December, homes priced under $200,000 plunged by 18.1% annually. Mid-tier housing priced between $200,000 to $750,000 saw a 10.2% year-over-year decline. Homes listed for more than $1 million fell by 4.4% annually.
Further, economists predict that the inventory shortages are likely to worsen over the year. As buyer demand remains strong, they expect home prices to continue to accelerate in markets the most starved for inventory.
Tech havens—such as San Jose-Sunnyvale-Santa Clara, Calif.; Seattle-Tacoma-Bellevue, Wash.; and San Francisco-Oakland-Hayward, Calif.—saw inventory declines of more than 30% in December compared to a year ago and listing price growth was above the national median.
Only three of the 50 largest metros in the U.S. saw inventory increases over the year: San Antonio-New Braunfels, Texas (up 8.8%); Minneapolis-St. Paul-Bloomington, Minn.-Wis. (up 7.4%); and Las Vegas-Henderson-Paradise, Nev. (up 4.8%), the report shows. All three also saw a year-over-year decline in their median listing prices.
Source: realtor.com(R)
