The U.S. housing inventory may be about to stop tightening, with prospects of an increase in the not-so-distant future, according to Javier Vivas, Director of Economic Research with Realtor.com. Although total inventory remains virtually flat year-over-year, new home listings increased 8 percent in September 2018 in comparison to the same month last year. At the same time, price gains continue to increase but at a slower rate, with the average home listed at a price up 4.4 percent over the same period.
Compared to August, September saw inventory grew 0.4 percent, an increase that belies the usual drop in supply as the autumn season begins. This brought inventory down by only 0.2 percent overall year-over-year—a fact Vivas stresses as an indicator that a recovery in inventory is underway. This increase in housing inventory has been most marked among homes listed above $350,000—a segment which shows an increase of 10 percent since last year—as well as in larger metropolitan areas, which have seen an increase in new listings up 13 percent. The cities witnessing the biggest jumps in inventory are all located in California save Seattle and Nashville, but other major cities also saw an increase in listings, including Chicago, Miami, Dallas, Boston, and New York.
Although growth has been mostly seen in pricier homes and large cities, Vivas stressed that the best news for buyers is that prices nationwide have dropped 8 percent for all new listings, making homes listed on the market for the first time $25,000 cheaper on average than they were a year ago. This fact is balanced out, however, by the fact that new and existing listings averaged out have increased. The median list price is flat at $295,000, with the average listing price having reached $483,000. The slowdown in price increases has been seen most strongly in the same metropolitan areas that also saw an increase in listings.
While Vivas considers the anticipated growth in inventory a good sign for buyers, he notes that the market continues to favor sellers in both moderately priced home sells and the secondary markets. Homes continue to sell at a more rapid pace than they did a year ago, and while inventory appears slated to return to more balanced levels, it is not to do so through the year’s end.
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