The month of December saw the largest year over year decline of housing inventory in almost three years, with inventory declining 12%, according to realtor.com.
That decline left the lowest number of homes for sale in the U.S since January 2018, according to the December 2019 Housing Trends Report from realtor.com.
The inventory decline increased among all levels of the housing market, including luxury.
Inventory of homes priced under $200,000 declined 18.1% year over year, higher than November’s drop of 16.5%.
“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,” according to realtor.com Senior Economist, George Ratiu.
Inventory of mid-tier housing between $200,000 and $750,000 declined 10.2% year over year, compared to November’s 7.4% decline.
Meanwhile, listings of homes priced over $1 million shrank by 4.4% year over year, up from almost 2% in November, according to realtor.com.
“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,” Ratiu said.
Realtor.com said that the inventory shortage isn’t showing signs of slowing down anytime soon.
December’s decline means there was a loss of about 155,000 listings when compared to December 2018.
San Jose-Sunnyvale-Santa Clara, California; Seattle-Tacoma-Bellevue, Washington and San Francisco-Oakland-Hayward, California all saw inventory declines of more than 30% in December as well as listing price growth above the national median.
Meanwhile, only three of the 50 largest U.S. metros saw inventory increase over the year: San Antonio-New Braunfels, Texas (8.8%); Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin (7.4%) and Las Vegas-Henderson-Paradise, Nevada (4.8%). These metros also had year over year declines in median listing prices.
Overall, the median U.S. listing price grew by 3%, to $299,950 in December, which is a deceleration compared to last month, realtor.com said.
On the other hand, realtor.com says that price growth is rising in metros where inventory declines were the greatest in December.
Of the 50 largest U.S. metros, 42 saw year over year gains in median listing prices, with 33 of the 50 growing faster than the national rate and 12 of those growing faster than December 2017’s rate of 8.2%.
Nationally, homes sold in 79 days in December 2019, two days more quickly than December 2018. However, in the 50 largest U.S. metros, the typical home sold at a nearly identical pace.