The number of new home listings has declined year-over-year in the past four months, despite an increase in the total of for-sale inventory, according to a new report by Zillow.
The report states that new listings fell 6.1% since March of 2018, while the overall inventory in the U.S. rose 1.2%. Homes are also staying on the market longer, as the average time on the market increased four days in February from a year earlier—the first increase in four years and the largest since 2011.
“There is a narrative that inventory is growing, which favors buyers. But the how and why is important," said Skylar Olsen, Zillow Director of Economic Research. "There may be more homes available for sale over the course of the month, but that's because more leftovers from previous months are sticking around. In truth, fewer homeowners are putting their homes on the market and buyer demand is falling back. Buyers won't have as much competition this shopping season and can take more time finding the perfect match, if it's out there."
Another area of concern, according to the report, is that the share of listings with a price cut is higher than this time last year in 33 of the nation’s 35 largest housing markets. Zillow stated that price cuts are more common in the most-expensive third of homes for sale, as 16.2% of “top-tier homes” have had a price cut, compared to 11.8% of “bottom-tiered homes.”
The average home is now worth $226,700, which is a 6.6% increase over last year, and the rate of appreciation has slowed each month after peaking at 8% growth in December 2018.
Home values in San Jose, California, fell 0.2% over the past year, but remain the most expensive of the 35 largest housing markets. This marks the first time home values have decreased annually in any of the top 35 markets, and the first drop in San Jose in seven years.
Home values in Atlanta, Georgia, rose 10.7%, and Indianapolis, Indiana, saw the highest increase at 12.8%.