According to Zillow’s Weekly Market Report for the week ending Oct. 17, home prices reached new heights while inventory levels were at record lows, resulting in the first signs that pending-sales activity might be beginning to slow.
Newly pending sales are up 19.6% over last year but have fallen 4.9% since last month and 1.7% since last week. Low inventory and an overdue seasonal slowdown may finally be dragging down sales, though sales volume remains close to what would be expected during a typical spring shopping season, according to Zillow.
Meanwhile, total inventory has dropped every week since that ending May 23 and is now down 37% – just over 500,000 houses – from last year, to a total of 863,234. Of the 50 largest U.S. markets, those with the least inventory compared to last year are Salt Lake City (-49.9%), Charlotte (-47.7%) and Riverside (-47%).
Concurrently, the time on market fell to just 12 days, which is 16 days faster than this time last year and one day faster than most weeks in August and September.
Zillow research shows entry-level and mid-market homes priced between $186,000 and $344,000 were selling at the fastest pace among all price tiers. The median list price rose to $346,259, up 11.7%, while the median sale price rose 10.9% ($28,250) above last year to $287,750 for the week ending Sept. 5.
Also, residential construction increased slightly in September and is up 11.1% year over year. However, construction activity is still below expected levels, considering the extreme demand for houses and builder confidence.