RealEstateEconomyWatch.com Insight and Intelligence on Residential Real Estate
Two days after rival web site Trulia announced it had detected signs that the year-long decline in inventories was slowing, Zillow said that the crunch could be beginning to ease somewhat.
Trulia‘s chief economist Jeff Kolko said Monday that Trulia’s seasonally adjusted quarter-over-quarter change in inventory is negative, but no longer falling as sharply as it did a few months ago. The quarter-over-quarter decline in inventory has been at a 14-21 percent annualized rate since October 2012, compared with a 23-29 percent annualized rate from March 2012 to September 2012.
Zillow’s Stan Humphries said that the overall number of homes listed for sale nationwide on Zillow was down 16.6 percent year-over-year in late February. Zillow looked at all homes available for sale on Zillow on Feb. 24, 2013, and compared it to the number of homes available on Feb. 24, 2012. The analysis covers homes nationally and in the 99 largest metro areas covered by Zillow, and across bottom, middle and top price tiers.
Nationwide, the greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier properties falling 20.5 percent year-over-year. That was followed by middle-tier homes (-17.2 percent year-over-year) and bottom-tier homes (-9.1 percent year-over-year). Only five metro areas showed more homes for sale overall last month than in February 2012: El Paso, TX (+18.5 percent); Albuquerque, NM (+8.1 percent); Little Rock, AR (+7.7 percent); Fort Myers, FL (+1.5 percent); and Youngstown, OH (+0.2 percent).
“The supply of for-sale listings continues to dry up, driven in part by potential sellers trapped in negative equity and homeowners who won’t sell out of fear they won’t be able to find a suitable home to buy later,” said Humphries. “But the impact of constrained inventory will create the solution to the problem. Over the past year, inventory tightness has contributed to increases in home values in many markets. As home values rise, some homeowners will be freed from negative equity and able to list their homes, which will contribute to an easing of the inventory crunch. While this inventory is coming, it may still be a frustrating spring for buyers vying for what inventory is available. It’s important to be patient and not commit to paying beyond one’s comfort level in the heat of negotiations.”
Large California metros experienced the biggest decrease in homes for sale over the past year. Among the 30 largest metros covered by Zillow, four of the top five in inventory contraction are located in California: Sacramento (-48 percent); Los Angeles (-45.7 percent); San Francisco (-40.9 percent); and San Diego (-39.4 percent). Minneapolis-St. Paul (-36.7 percent) rounded out the top five.
But while the overall number of homes listed for sale in February was down significantly year-over-year almost across the board, the national drop was actually less severe than in January. In January, the number of for-sale listings was down 17.5 percent year-over-year, which could indicate an easing of the inventory crunch. Almost two-thirds (63) of the areas surveyed showed a smaller year-over-year decline in for-sale homes in February than in January.
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| Year-over-year % Change In Homes For Sale Listed On Zillow, Feb. 24, 2013 vs. Feb. 24, 2012 | ||||
| Metro Area | Bottom-Tier Homes | Middle-Tier Homes | Top-Tier Homes | All Homes |
| UNITED STATES | -9.1% | -17.2% | -20.5% | -16.6% |
| New York | -13.3% | -23.2% | -19.3% | -18.9% |
| Los Angeles | -56.8% | -42.4% | -38.2% | -45.7% |
| Chicago | -11.5% | -15.2% | -19.8% | -16.2% |
| Dallas-Fort Worth | -9.8% | -20.6% | -24.6% | -20.7% |
| Philadelphia | -8.2% | -18.3% | -25.2% | -18.1% |
| Houston | -16.6% | -26.5% | -25.5% | -23.7% |
| Washington, DC | -26.0% | -21.4% | -22.7% | -23.3% |
| Miami-Fort Lauderdale | 18.1% | 3.5% | -20.9% | -6.9% |
| Atlanta | -44.3% | -33.9% | -23.2% | -32.1% |
| Boston | -19.1% | -28.2% | -24.4% | -24.2% |
| San Francisco | -51.0% | -40.0% | -34.9% | -40.9% |
| Detroit | -18.3% | -23.0% | -24.4% | -21.9% |
| Riverside, CA | -38.2% | -43.7% | -29.6% | -36.2% |
| Phoenix | -42.2% | -22.5% | -20.7% | -26.4% |
| Seattle | -31.7% | -13.2% | -19.5% | -21.2% |
| Minneapolis-St Paul | -44.6% | -31.2% | -34.7% | -36.7% |
| San Diego | -43.0% | -43.8% | -32.1% | -39.4% |
| Tampa, FL | -15.0% | -21.6% | -22.1% | -20.1% |
| St. Louis | -7.0% | -10.4% | -19.9% | -13.2% |
| Baltimore | -16.4% | -18.1% | -16.3% | -16.9% |
| Denver | -27.0% | -30.7% | -35.6% | -32.1% |
| Pittsburgh | -2.5% | -5.4% | -4.0% | -4.0% |
| Portland, OR | -24.5% | -15.1% | -21.7% | -20.5% |
| Sacramento, CA | -61.5% | -53.2% | -33.4% | -48.0% |
| Orlando, FL | -28.6% | -35.6% | -21.5% | -27.1% |
| Cincinnati | 6.2% | 0.9% | -7.0% | -0.5% |
| San Antonio | -16.1% | -21.3% | -18.7% | -18.7% |
| Cleveland | -4.6% | -7.4% | -18.0% | -10.5% |
| Kansas City | -23.0% | -32.4% | -37.9% | -32.4% |
| Las Vegas | -30.3% | -34.2% | -31.2% | -32.1% |
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