A fourth national market report has added to the evidence that winter inventories are extraordinarily—even dangerously—low. Realtor.com has joined RE/MAX, NAR and Zillow in reporting levels significantly below last year. (See Tight Inventories Propel Prices and Winter Inventories Plant Seeds for Spring Surprises).
The realtor.com January National Housing Trend Report shows that inventory has decreased 6.7 percent month over month and 8.7 percent year over year.
In January, homes spent approximately 103 days on the market, which was an increase of 4.6 percent month over month and a decrease of 4.6 percent year over year. Median prices remained at $211,000, and while there was no movement month over month, prices did see an increase of 8.8 percent year over year, continuing the upward trend seen in the latter half of 2014.
Most markets are struggling to achieve the proper balance of homes for sale and qualified buyers, said realtor.com. Low inventory has become a national challenge as homeowners opt to stay put longer—a record 10 years—rather than move up and move on.
Most housing markets are appreciating in value as homes sell faster. In fact, prices increased 8.8% in January over 2014, according to the report.
“We are not seeing enough growth in inventory to support recovering demand,” Smoke said. About 80% of the housing markets studied saw a drop in inventory levels, according to the report.
Prices will therefore continue to rise in markets where demand outstrips supply, said realtor.com’s chief economist Johnathan Smoke, citing four standout markets that are experiencing 14% price increases while also adding 4% more houses to the market: Jersey City, NJ; Jacksonville, FL; Pittsburgh; and Tampa, FL.
“Only these highlighted markets have growth in inventory, and growth in inventory is necessary to see sustainable growth in demand,” said Smoke.