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Housing Inventory Dips to Lowest Level in 10+ Years

A new forecast from Zillow predicts home sales will peak during the autumn and begin to moderate into 2021, but will remain above pre-pandemic levels.

The coming months will also see home prices remaining higher. Zillow is forecasting seasonally adjusted home prices will inch up by 1.2% from August to November and rise 4.8% between August 2020 and August 2021—the latter replaces a previous forecast aiming at a 3.8% increase in home prices over the same time frame. Zillow explained this forecast was based on strong sales and vibrant pricing during the summer despite a serious imbalance between housing supply and buyer demand, coupled with a delay of this year’s buying season due to the COVID-19 pandemic.

The annualized pace of new home sales in August exceeded 1 million homes, which Zillow said is a level unseen since 2006.

Citing proprietary data for the week ending Sept. 19, Zillow noted that buyers’ demand is showing no signs of abating: pending sales are 21.8% higher than one year ago. However, this could eventually cool as the summer buying season transitions into the traditionally slower autumn months. Average time-on-market for listings is now at 13 days, only one day quicker than the same period last year.

A more significant year-over-year measurement can be found in housing inventory. Zillow reported the decline became acute during the first week of June and has yet to reverse itself, as for-sale listings plummeted by 34.6% below the level set one year ago. This is the greatest year-over-year deficit seen since Zillow started tracking weekly statistics in 2009. There were 13.6% fewer new listings last week versus the same point in 2019.

Furthermore, Zillow noted the median sale price hit a new peak at $284,000 as of the week ending Aug. 8, which 8.7% higher than one year ago and the largest year-over-year increase seen since at least the beginning of 2019. Sale prices were up 2% over the month prior. The median list price rose to $345,000, up 10% from last year but only a scant 0.1% higher than the prior month.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.

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