An increase in the number of single-family home rentals has taken away a chunk of sellable inventory, according to the May Zillow Real Estate Market Reports. The typical home stayed on the market for just 77 days, the fewest days on Zillow ever reported.
The number of for-sale homes hitting the market is dropping at its fastest pace in almost four years, and across the country, home shoppers will have 9% fewer homes to choose from than a year ago, which is the greatest drop in inventory since August 2013, when inventory was down more than 10%, Zillow reports.
Columbus, Ohio; San Jose, Calif.; and Minneapolis reported the greatest annual declines in the number of homes for sale, with about 30% fewer homes for sale in each market. In San Diego, there are 26% fewer homes on the market than a year ago and 22% fewer in Seattle. Both San Diego and Seattle have high buyer demand and home value growth of over 6%.
The median home value across the country is $199,200, up 7.4% since this time last year. Seattle; Dallas; and Tampa, Fla., reported the highest year-over-year home value appreciation among the 35 largest U.S. metros. In Seattle, home values rose almost 13% to a median value of $440,100. Home values in Dallas and Tampa are up about 11% since this time last year.
Median rent across the nation rose 0.7% since last May to a median payment of $1,416 per month. Seattle; Sacramento, Calif.; and Los Angeles reported the greatest year-over-year rent appreciation among the 35 largest U.S. metros. Rents in Seattle are up almost 6% to a Zillow Rent Index of $2,127. Median rent in Sacramento is up 4.5%, while Los Angeles’ median rent is up 4%.
“Inventory has been falling for years, with supply no longer meeting demand, and there are multiple reasons for the worsening situation,” says Zillow Chief Economist Dr. Svenja Gudell.
According to Zillow, changes in demographics – such as the large number of millennials reaching their home-buying years – are ushering in big changes on the demand side, while issues from the supply side, such as low levels of new-home construction, are complicating the housing market.
“There is no silver bullet that will clear the market of all of these issues, and buyers frustrated by the status quo will likely have to remain patient and be ready to pounce once that perfect home does become available,” Gudell adds.