Housing inventory is increasing after seeing a shortage for four consecutive years. It has done so in the past four months in a trend that is likely to continue, according to Zillow's latest Real Estate Market Report, which indicated that inventory grew 1.2 percent year-over-year with 19,455 more homes available for sale in January compared to the same period in 2018.
However, the rate of the growth of housing supply has been slow and the report indicated that this pace has "done little to reverse the long contraction in inventory."
The markets that faced the most acute housing shortage over the past four years, especially on the West Coast, are the ones that have been seeing the largest increase in supply, tilting the market towards homebuyers, the report revealed.
"For four years it felt like homebuyers couldn't catch a break as for-sale inventory became tighter with each passing month," said Aaron Terrazas, Senior Economist at Zillow. "Homebuyers are not out of the woods yet, but there is a glimmer of light on the horizon."
Year over year, housing inventory in key West Coast markets such as San Jose, Seattle, San Diego, Los Angeles, and San Francisco grew at a rate between 25 percent and 42.9 percent.
However, some markets especially on the East Coast, such as Washington, D.C., Baltimore, and Pittsburgh, saw housing supply decrease by at least 10 percent.
Terrazas also cautioned homebuyers that even though the inventory was increasing the rise in home values at a steady clip showed that "demand still outstrips supply and with mortgage rates down from recent highs, the first quarter of 2019 is shaping up to be more competitive than the lull we saw as 2018 came to a close."
According to the report, median home values saw a 7.5 percent increase year-over-year to $225,300 and have grown at a steady pace over the past two years.