Redfin: Home Prices Jumped in February as Sales Were Constrained by a Double-Digit Inventory Dip

Affordability Pressures Mount amid Rising Mortgage Rates

Seattle, WA – March 16th, 2017 (BUSINESS WIRE) U.S. home prices rose 7.2 percent in February, which marked 60 consecutive months of annual increases since home prices bottomed in early 2012, according to Redfin (www.redfin.com), the next-generation real estate brokerage.

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Home sales gained a modest 1.8 percent, constrained by a continuing inventory shortage. The number of homes for sale fell 12.9 percent year over year in February, the third month in a row that inventory declined by double digits. Housing affordability pressures are increasing, especially for first-time buyers, amidst continuously increasing prices and the Federal Reserve’s recent announcement of an interest rate hike. However, rising prices may lead more homeowners to list their homes this spring.

“The total level of home equity reached a new peak at the close of 2016, according to recent Fed data,” said Redfin chief economist Nela Richardson. “While great for homeowners, continuously strong price growth across the U.S. since 2012 has posed significant challenges for first-time buyers, especially given such low supply in affordable price-tiers. There is a silver lining on the horizon, however. Rising prices and increased equity may tip the scales for homeowners who have been delaying their decision to move up, which could add much-needed starter-home inventory to the market.”

Despite affordability concerns and low inventory, February still proved to be a strong month for buyer demand. Market speed increased again, making for the fastest February Redfin recorded since 2010. The typical home that sold last month went under contract in 60 days, eight days faster than one year prior. Nearly 15 percent of all homes listed for sale in February were off the market within two weeks, up from 11.7 percent last year.

Regional February Highlights

Competition

  • Seattle, WA was the fastest market, with nearly half of all homes pending sale in just 12 days, down from 13 days from a year earlier. Oakland, CA and Denver, CO were the next fastest markets with 15 and 18 median days on market, followed by San Jose, CA (21) and San Francisco, CA (28).
  • Competition was fierce in San Jose, CA where 63.1% of homes sold above list price, followed by 62.0% in San Francisco, CA, 59.1% in Oakland, CA, 49.3% in Seattle, WA, and 36.3% in Tacoma, WA.

Prices

  • Portsmouth, NH had the nation’s highest price growth, rising 21.4% since last year to $285,000. Deltona, FL had the second highest growth up 20.1%, followed by Tampa, FL (18.8%), Jacksonville, FL (18.7%), and Ogden, UT (17.2%).
  • Prices dropped in four metros, including Baton Rouge, LA (-4.2%), Wilmington, DE (-2.5%), Honolulu, HI (-1%), and Pittsburgh, PA (-0.8%).

Sales

  • 17 out of 90 metros saw sales surge by double digits from last year. Charleston, SC led the nation in year-over-year sales growth, up 39.2%, followed by St. Louis, MO, up 30%. Fort Myers, FL rounded out the top three with sales up 25.2% from a year ago.
  • Albany, NY saw the largest dip in sales since last year, falling 22.5%. Home sales in Portsmouth, NH declined by 22.4% as well.

Inventory

  • Rochester, NY had the largest decrease in overall inventory, falling 42.4% since last February. Buffalo, NY (-37.8%), Seattle, WA (-35.3%), and Omaha, NE (-34.7%) also saw far fewer homes available on the market than a year ago.
  • Provo, UT had the highest increase in the number of homes for sale, up 30.7% year over year, followed by Knoxville, TN (21.6%) and New Orleans, LA (16.1%).

To read the full report, complete with data and charts, please click here.

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $40 billion in home sales through 2016.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To view Redfin’s press center, click here.

Contacts

Redfin Journalist Services:
Jeffery Marino
(206) 588-6863
press@redfin.com

Redfin: Home Prices and Sales Showed Steady Growth in January While Inventory Continued to Decline

Last Month was the Fastest January Housing Market on Record

Seattle, WA – February 16, 2017 (BUSINESS WIRE) U.S. home prices rose 7.0 percent in January and home sales gained 5.6 percent over last year, according to Redfin (www.redfin.com), the next-generation real estate brokerage.

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Inventory fell 12 percent compared to last year, the largest annual drop in the number of homes for sale since April 2013. The dearth of supply was due in part to a 5.1 percent annual decline in new listings. But last month was also the fastest January on record since Redfin began tracking this measure in 2010. The typical home sold in 59 days — seven days faster than last year and two weeks faster than January 2015.

“Buyers jumped through three hurdles last month: rising prices, low inventory and a fast market,” said Redfin Chief Economist Nela Richardson. “Sellers, however, are still warming the bench as the supply picture looks weaker than demand. This was the first January in three years in which new listings fell short of the previous year.”

The national trend of strong home sales and price growth in January was driven by the country’s more affordable markets. Double-digit sales and price growth primarily occurred in metro areas with a median sale price under $300,000, such as Lakeland, Florida, Poughkeepsie, New York, and Memphis, Tennessee. The highest competition continued to take place in the tech hubs of the West Coast.

Regional January Highlights

Competition

  • Denver, CO, was the fastest market, with half of all homes pending sale in just 23 days, down from 43 days a year earlier. Seattle, WA, and Oakland, CA, were the next fastest markets, with 26 and 27 median days on market, respectively, followed by Grand Rapids, MI (29), and Fresno, CA (32).
  • Prices were most likely to escalate in San Jose, CA, where 48.8% of homes sold above list price, followed by 48.5% in Oakland, CA, 47.7% in San Francisco, CA, 37.3% in Seattle, WA, and 34.4% in Tacoma, WA.

Prices

  • Dallas-Fort Worth, TX, had the nation’s highest price growth, rising 17% since last year to $233,995. Cleveland, OH, had the second-highest growth at 15.4% year-over-year price growth, followed by Cincinnati, OH (15%), Salt Lake City, UT (14.9%), and Ogden, UT (14.3%).
  • Two metros, Baton Rouge, LA (-6.4%), and Allentown, PA (-2.8%), saw year-over-year price declines in January.

Sales

  • Thirty-three out of 90 metros saw sales surge by double digits from last year. Lakeland, FL, led the nation in year-over-year sales growth, up 28.7%, followed by Poughkeepsie, NY, up 28.0%. Memphis, TN, rounded out the top three with sales up 26.1% from a year ago.
  • Columbia, SC, saw the largest decline in sales since last year, falling 65.0%. Home sales in Grand Rapids, MI, and Buffalo, NY, declined by 14.3% and 9.9%, respectively.

Inventory

  • Buffalo, NY, had the largest decrease in overall inventory, falling 39.8% since last January. Portsmouth, NH (-35.2%), Rochester, NH (-34.7%), and Omaha, NE (-34.6%), also saw far fewer homes available on the market than a year ago.
  • Provo, UT, had the highest increase in the number of homes for sale, up 33.7% year over year, followed by San Jose, CA (17.0%), and Raleigh, NC (16.7%).

To read the full report, complete with data and charts, please visit the following link: www.redfin.com.

About Redfin Corporation

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the highly accurate automated home-value estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales to date, and saved customers more than $335 million in fees, and counting.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center.

Contacts

Redfin Journalist Services:
Jeffery Marino
(206) 588-6863
press@redfin.com

Redfin: Home Prices Continued to Climb in December While Inventory Hit a Three-Year Low

One in three homes sold in December was under contract within two weeks – the largest portion on record since 2010

Seatlle, WA – January 19, 2017 (BUSINESS WIRE) U.S. home prices rose 4.7 percent in December as inventory declined 12.7 percent, according to Redfin (www.redfin.com), the next-generation real estate brokerage. Home sales were flat, growing just 0.5 percent from December 2015.

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Despite lackluster home sales volume, the extreme shortage of homes on the market made for the fastest December on record since Redfin began keeping track in 2010. Last month, the typical home went under contract in 54 days – five days faster than a year earlier.

Among homes sold in December, nearly one-third (32.7%) went under contract within two weeks, the largest reduction in inventory in any single month Redfin has on record.

“We’ve never before seen homes turn over so quickly at a national level,” said Redfin Chief Economist Nela Richardson. “This tells us that buyers are not deterred by low inventory, election uncertainty and slightly higher mortgage rates. If anything, these headwinds are motivating them to act sooner rather than later.”

Regional Highlights from December:

  • Seattle, WA, was the fastest market, with half of all homes pending sale in just 19 days, down from 24 days a year earlier. Oakland, CA, and Denver, CO, were the next fastest markets, both posting a median of 22 days on market, followed by Grand Rapids, MI (23), and Boston, MA (26).
  • Seattle also had the nation’s highest price growth, rising 14.8% since last December to $459,975.
  • Six metros saw price declines in December. Baton Rouge, LA, saw its home prices decline the most since last December, falling 7.7 percent to $175,370.
  • 13 out of 90 metros saw sales increase by double digits from last December. Poughkeepsie, NY, led the nation in year-over-year sales growth, up 57.9%, followed by Madison, WI, up 32.0%. Detroit, MI, rounded out the top three with sales up 30.8% from a year earlier.
  • Detroit, MI, had the largest decrease in overall inventory, falling 31.2% since December 2015. Rochester, NH (-30.7%), Portsmouth, NH (-29.4%), and Rochester, NY (-28.7%), also saw far fewer homes available on the market than in late 2015.

To read the full report, complete with data and charts, please visit the following link: www.redfin.com.

About Redfin Corporation

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the highly accurate automated home-value estimate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $31 billion in home sales to date, and saved customers more than $335 million in fees, and counting.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center.

Contacts:

Redfin Journalist Services:
Jeffery Marino
(206) 588-6863
press@redfin.com

First-Time Homebuyers Face Worsening Starter-Home Shortage Heading Into 2017 Reports Trulia

House Hunters in Portland, Miami, San Francisco, Sacramento, Los Angeles and Denver Among the Hardest Hit as Tight Starter Home Inventory Becomes More Unaffordable

San Francisco, CA – Dec. 14, 2016 (PRNewswire) Trulia®, a leading destination for homebuyers and renters, today released the findings from the Trulia Inventory and Price Watch. This quarter’s report found that the number of homes for the average first-time homebuyer saw its steepest year-over-year drop in three years, falling 12.1% since 2015. Moreover, these buyers will need to pay 1.9% more of their income on average to buy a starter-home in their local market.

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U.S. Housing Inventory Shrinks 9.1% Year-Over-Year

Nationally, housing inventory fell for the sixth consecutive quarter, dropping 9.1% from a year ago. Across different housing segments, home buyers saw the biggest decreases in starter and trade-up home inventory. The number of starter homes and trade-up homes on the market dropped 12.1% and 12.9% from this time last year, respectively. Meanwhile, premium home inventory fell a more moderate 5.6%.

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Harder to Get Started for First-Time Home Buyers

Declines in the affordability of starter homes continues to plague first-time home buyers. Today, the average starter-home buyer will need to spend 38.5% of their monthly income to buy a starter home – a 1.9 percentage point increase from last year. This decline in affordability is more than twice as much for trade-up homes (up 0.9 percentage points) and nearly four times the amount needed to buy a premium home (up 0.5 percentage points). Comparatively, buyers of trade-up homes and premium homes would each need to spend just 25.5% and 13.9% of their income to buy a home, respectively.

First-time homebuyers face worsening starter-home shortage heading into 2017 as starter-home inventory falls nationally by 12.1% year-over-year.

First-time homebuyers face worsening starter-home shortage heading into 2017 as starter-home inventory falls nationally by 12.1% year-over-year.

Starter Home Crunch Squeezes Coastal Markets

In many coastal housing markets, affordability has eroded significantly over the last year, especially in Tacoma, Wash. and Portland, Ore. But in Sacramento, Calif., Los Angeles, San Francisco, San Diego and Miami, starter home unaffordability continues to be a persistent problem. Among the 100 largest U.S. metros, these metros ranked in the top 10 annual declines in affordability for starter homes from 2012 to 2015 and remain in the top 10 for declines in affordability for starter homes from 2015 to 2016.

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QUOTES FROM TRULIA’S CHIEF ECONOMIST RALPH MCLAUGHLIN:

  • “Tight inventory will still be a big obstacle to homeownership in many markets in 2017, but I’m cautiously optimistic that we’ll see the bottom of the current housing shortage as the year progresses. That said, buyers might not see price relief if President-Elect Trump’s to-be-seen policies boost demand without boosting supply.”
  • “As mortgage rates continue to trend upwards, homebuyers in the costly coastal housing markets in California and the Northeast may get some relief. Rising rates will likely cool the fierce competition in these markets where inventory has been tightening and affordability has worsened.”

About the Trulia Inventory and Price Watch

The Trulia Inventory and Price Watch offers buyers and sellers deeper insight into the change in supply and affordability of homes over the past year, within three different segments of the market: starter homes, trade-up homes, and premium homes. Based on the for-sale homes listed on Trulia, this report calculates housing inventory within each segment nationally and in the 100 largest U.S. metros, from Dec. 1, 2015 to Dec. 1, 2016. For the full report and methodology, see here.

About Trulia

Trulia® is a vibrant home shopping marketplace, focused on giving homebuyers, sellers, and renters the information they need to make better decisions. On mobile and the Web, Trulia provides house hunters with insights and unique information about properties, neighborhoods, and real estate agents. Additionally, Trulia offers data and information about schools, crimes, commute times, and the real estate market.

Launched in 2005, Trulia is based in San Francisco and is owned and operated by Zillow Group (NASDAQ: Z and ZG).

Trulia is a registered trademark of Trulia, LLC.

Media Contact:

Daisy Kong
pr@trulia.com
(415) 400-7391

Existing-Home Sales Soften Further in August

Washington, D.C. – September 22, 2016 (Realtor.org) Existing-home sales eased up in August for the second consecutive month despite mortgage rates near record lows as higher home prices and not enough inventory for sale kept some would-be buyers at bay, according to the National Association of Realtors®. Only the Northeast region saw a monthly increase in closings in August, where inventory is currently more adequate.

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Total existing-home sales(1), which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, declined 0.9 percent to a seasonally adjusted annual rate of 5.33 million in August from a downwardly revised 5.38 million in July. After last month’s decline, sales are at their second-lowest pace of 2016, but are still slightly higher (0.8 percent) than a year ago (5.29 million).

Lawrence Yun

Lawrence Yun

Lawrence Yun, NAR chief economist, says recent job growth is not yielding higher home sales. “Healthy labor markets in most the country should be creating a sustained demand for home purchases,” he said. “However, there’s no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold.”

Added Yun, “Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines.”

The median existing-home price(2) for all housing types in August was $240,200, up 5.1 percent from August 2015 ($228,500). August’s price increase marks the 54th consecutive month of year-over-year gains.

Total housing inventory(3) at the end of August fell 3.3 percent to 2.04 million existing homes available for sale, and is now 10.1 percent lower than a year ago (2.27 million) and has declined year-over-year for 15 straight months. Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in July.

The share of first-time buyers was 31 percent in August, which is down from 32 percent both in July and a year ago. First-time buyers represented 30 percent of sales in all of 2015.

“It’s very concerning to see that inventory conditions not only show no signs of improving but have actually worsened in recent months from their already suppressed levels a year ago,” added Yun. “While recent data from the U.S. Census Bureau (link is external) shows that household incomes rose strongly last year, home prices are still outpacing incomes in many metro areas because of the persistent shortage of new and existing homes for sale. Without more supply, the U.S. homeownership rate will remain near 50-year lows.”

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage was 3.44 percent in August for the second consecutive month and remained at its lowest rate since January 2013 (3.41 percent). The average commitment rate for all of 2015 was 3.85 percent.

Properties typically stayed on the market for 36 days in August, unchanged from July and down considerably from a year ago (47 days). Short sales were on the market the longest at a median of 144 days in August, while foreclosures sold in 42 days and non-distressed homes took 35 days. Forty-six percent of homes sold in August were on the market for less than a month.

NAR President Tom Salomone, broker-owner of Real Estate II Inc. in Coral Springs, Florida, says in today’s fast-moving market, a Realtor® who knows about down payment options(4) and their target area is essential to a successful buying experience. “Given the inventory shortages in most markets, new listings at affordable prices are receiving multiple offers and going under contract almost immediately upon becoming available,” he said. “Home shoppers serious about buying need to be ready with a pre-approval. This allows a Realtor® to hone in only on homes within the buyer’s price range and ensures any offer presented to the seller is taken seriously.”

Inventory data from Realtor.com® (link is external) reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in August were San Francisco-Oakland-Hayward, Calif., San Jose-Sunnyvale-Santa Clara, Calif., and Seattle-Tacoma-Bellevue, Wash., all at a median of 33 days; Denver-Aurora-Lakewood, Colo., 36 days; and Vallejo-Fairfield, Calif., at a median of 37 days.

All-cash sales were 22 percent of transactions in August, up from 21 percent in July and unchanged from a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in August, up from 11 percent in July and 12 percent a year ago. Sixty-two percent of investors paid in cash in August.

Distressed sales(5) — foreclosures and short sales — were 5 percent of sales in August (lowest since NAR began tracking in October 2008), unchanged from last month and down from 7 percent a year ago. Four percent of August sales were foreclosures and 1 percent were short sales. Foreclosures sold for an average discount of 12 percent below market value in August (18 percent in July), while short sales were discounted 14 percent (16 percent in July).

Single-family and Condo/Co-op Sales
Single-family home sales declined 2.3 percent to a seasonally adjusted annual rate of 4.70 million in August from 4.81 million in July, but are still 0.6 percent above the 4.67 million pace a year ago. The median existing single-family home price was $242,200 in August, up 5.3 percent from August 2015.

Existing condominium and co-op sales leaped 10.5 percent to a seasonally adjusted annual rate of 630,000 units in August from 570,000 in July, and are now 1.6 percent above August 2015 (620,000 units). The median existing condo price was $225,100 in August, which is 3.7 percent above a year ago.

Regional Breakdown
August existing-home sales in the Northeast jumped 6.1 percent to an annual rate of 700,000, which is unchanged from a year ago. The median price in the Northeast was $274,100, which is 0.8 percent above August 2015.

In the Midwest, existing-home sales decreased 0.8 percent to an annual rate of 1.27 million in August, but are still 0.8 percent above a year ago. The median price in the Midwest was $190,700, up 5.5 percent from a year ago.

Existing-home sales in the South in August fell 2.7 percent to an annual rate of 2.16 million, but are still 0.9 percent above August 2015. The median price in the South was $209,700, up 6.7 percent from a year ago.

Existing-home sales in the West lessened 1.6 percent to an annual rate of 1.20 million in August, but are still 0.8 percent higher than a year ago. The median price in the West was $347,400, which is 9.2 percent above August 2015.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1. Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample — about 40 percent of multiple listing service data each month — and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2. The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3. Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4. According to NAR’s third quarter Housing Opportunities and Market Experience (HOME) survey, fewer than 20 percent of respondents across all ages, income brackets and education levels indicated that they need 10% or less to finance their home purchase.

5. Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for August will be released September 29, and Existing-Home Sales for September will be released October 20; release times are 10:00 a.m. ET.

Media Contact:

Adam DeSanctis
(202) 383-1178
Email

First-Time Buyers Face Lack of Inventory and Higher Prices

Entry-level homes are rising in value the fastest in most large U.S. housing markets, making it tough for first-time buyers to enter the market this spring

– There are 5.9 percent fewer homes for sale in the U.S. than a year ago.

– There are 10.4 percent fewer entry-level homes for sale in the U.S. than a year ago.

– Low supply is driving up home prices among entry-level homes, which are often sought after by first-time buyers.

– National home values rose 4.8 percent to $186,200, according to the first quarter Real Estate Market Reports. Rents rose 2.6 percent to $1,389.

Seattle, WA – April 22, 2016 (PRNewswire) Home values are rising the fastest among entry-level homes in more than half of the largest U.S. housing markets, according to first quarter Zillow® Real Estate Market Reports(i). Rising home values in this segment of the market can be attributed to a lack of supply, with 10 percent fewer homes for sale this year compared to last.

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The median value of entry-level homes, those in the bottom third(ii) of the market, rose the most over the past year in Denver, up 20 percent, followed by Portland and Dallas. There are 13 percent fewer entry-level homes available in Denver than there were a year ago. The number of entry-level homes available declined the most in Portland. There are 40 percent fewer entry-level homes available in Portland than there were a year ago.

The findings signal difficult times ahead for first-time homebuyers looking to enter the market. Going into home-shopping season this spring, buyers will find fewer homes in the bottom and middle of the market — the homes most affordable for first-time buyers. The trend also highlights the different experiences buyers are having in the recovering housing market. Buyers looking for the most expensive homes will find slower price growth, a larger selection, and less competition this spring than entry-level buyers who are likely to face stiff competition, bidding wars, and very few homes to choose from.

“It’s going to be a tough home-buying market this spring, especially for first-time buyers or even people looking to move up into a slightly more expensive home,” said Zillow Chief Economist Dr. Svenja Gudell. “In order to stand out in a competitive market, buyers should get pre-approved for a loan, find an agent who has experience with bidding wars, and consider coming in at the asking price, so the seller knows they’re serious.”

In all of the largest U.S. housing markets, more than a third of the homes available for sale are in the most expensive segment — in the top third of the overall housing stock in the market. In nine markets, top-tier homes make up more than half of the inventory.

The most expensive homes on the market are more likely to have a price cut, a signal that there’s less demand for top-tier homes. The share of top-tier listings with a price cut has increased 1.6 percentage points over the past year.

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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) 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.

(ii) Homes in each metropolitan region are assigned to the bottom, middle or top tier of homes based on their estimated home value. Each tier contains one-third of the homes in the metro region, and the thresholds defining each tier are computed separately for each metro.