Zillow: Housing inventory turnaround begins
Although year-over-year, housing inventory was down in June, it has improved since the beginning of the year as the spring selling season brought with it an increased inventory, according to Zillow. This report comes a day after Realtor.com released its own inventory report, which also indicated a lessening in the inventory crunch.
Overall, the number of listings on Zillow (Z) dropped 12.2% year-over-year earlier this month. This is slightly brighter than the 17.5% shortfall seen in January.
June’s year-over-year inventory levels improved compared to January in 70 metros. Among the 30 largest metros covered by Zillow, those with the highest degree of year-over-year inventory improvement between January and June were Phoenix and San Diego, with 31.9 percentage point improvement and 14.9 percentage point improvement, respectively.
Between January and June, inventory shortages worsened in 29 metros, and in 11 of the top 30 largest metros.
Las Vegas, Chicago and Washington D.C. were the large metros that saw inventory constraints tighten the most since the beginning of the year, decreasing by 21.8 percentage point, 12.3 percentage point and 9.8 percentage point, respectively.
"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," said Zillow Chief Economist Stan Humphries.
He added, “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 5% or above to more moderate levels closer to historic norms of 3% or 4%. ”
The greatest year-over-year decreases were seen in more expensive homes across the country. Bottom-tier properties for sale on Zillow nationwide fell only 2.5% in early June compared to June 2012.