Recent market research suggests the U.S. housing market is experiencing a decline in inventory. Yet, the average price of properties sold is rising. According to the latest figures published by Realtor.com, national inventory decreased by 6.9 percent year-over-year, while 50 of the largest metros declined by 5.3 percent.
The Decline of Inventory in the U.S. Housing Market
Data compiled by Realtor.com suggests that the availability of properties is dropping at local and national levels. The decline equates to a loss of 98,000 property listings compared to October 2018.
The volume of new listings on the market has also dropped by 3.4 percent since this time last year. U.S. metros seeing the largest declines are:
- San Diego, Carlsbad (CA): -20.1 percent;
- Rochester (NY): -20.1 percent;
- Phoenix, Mesa, Scottsdale (AZ): -20.0 percent;
- Washington, Arlington, Alexandria (DC/VA/MD/WV): -19.6 percent;
- Philadelphia, Camden, Wilmington (PA/NJ/DE/MD): -19.4 percent;
- Cincinnati (OH/KY/IN): -18.6 percent;
- Oklahoma City (OK): -17.6 percent;
- Memphis (TN/MS/AR): -17.3 percent;
- Virginia Beach, Norfolk, Newport News (VA/NC): -17.3 percent;
- Providence, Warwick (RI/MA): -16.2 percent;
- Nashville, Davidson, Murfreesboro, Franklin (TN): -15 percent;
- Riverside, San Bernardino, Ontario (CA): -13.9 percent;
- Birmingham, Hoover (AL): -13.5 percent;
- Seattle, Tacoma, Bellevue (WA): -12.9 percent;
- Pittsburgh (PA): -12.7 percent;
- St. Louis (MO/IL): -12.6 percent.
But, an interesting statistic is that the new listing share of active inventory has gone up by 0.7 percent. Given the six months of consecutive inventory declines, this could be a sign that things are starting to level out.
Out of the 50 largest U.S. metros, only nine of them saw an increase in inventory. They are as follows:
- Minneapolis, St. Paul, Bloomington (MN/WI): +15.7 percent;
- Las Vegas, Henderson, Paradise (NV): +14.0 percent;
- San Antonio, New Braunfels (TX): +8.8 percent;
- Detroit, Warren, Dearborn (MI): +5.1 percent;
- Atlanta, Sandy Springs, Roswell (GA): +4.5 percent;
- Denver, Aurora, Lakewood (CO): +4.3 percent;
- Dallas, Fort Worth, Arlington (TX): +3.8 percent;
- Houston, The Woodlands, Sugar Land (TX): +0.4 percent;
- Chicago, Naperville, Elgin (IL/IN/WI): +0.3 percent.
Do Lower Inventories Equate to New Opportunities for Selling Homes?
In a word, yes. With inventories dwindling across the country, people have a unique opportunity to sell. Buyers also have more purchasing power, thanks in part to low-interest rates.
Another reason is the weather. During the holidays and winter, buyers are typically very serious about purchasing properties. However, the weather isn’t much of a concern in milder climates like Tampa, Florida.
Homes are Getting Snapped Up Quickly
On a national level, homes were sold within 66 days in October 2019, which is 3 more days than the same period last year. Buyers, including those purchasing their first home, are taking advantage of sub-four percent mortgage interest rates.
Because of the steady demand for housing, market inventory is drying up at an accelerated pace. This can often be an issue for first-time buyers, who get priced out of the market when inventory is low.
The State of the Housing Market in Tampa, Florida
In Tampa, inventory levels decreased by 7.1 percent. Homes for sale in October 2019 were on the market for around 60 days, which is 6 days less than the national average. However, homes were on the market 3 days longer compared to October 2018.
The median listing price for properties in Tampa was approximately $279,900. That’s an increase of 4.5 percent compared to the same period a year ago.
This tells us that homes are highly sought-after in Tampa. Even with the increased prices compared to the previous year, buyers are eager to buy homes in Tampa.
Are Millennials the Driving Force Behind the Inventory Downturn?
Data compiled by Realtor.com in 2016 suggests that millennials are tired of their current homes. They also want to get married or move in with their partners and start a family. Therefore, they are looking for homes close to good schools.
Related: Realtor.com National Market Outlook
Easier Access to Credit and Lower Housing Inventory
In September 2019, mortgage credit access was up 0.7 percent compared to the same month last year. Furthermore, FICO scores are rising, with the average FICO score of 737 in August 2019 on closed mortgages.
According to figures released from Freddie Mac’s Primary Mortgage Market Survey, mortgage rates are receding across the board:
- Five-year treasury-indexed hybrid adjustable-rate mortgages averaged 3.39 percent. The rate was 4.09 percent 12 months ago;
- 15-year fixed-rate mortgages averaged 3.15 percent. The rate was 4.24 percent 12 months ago;
- 30-year fixed-rate mortgages averaged 3.66 percent. The rate was 4.81 percent 12 months ago.
Receding mortgage rates aren’t the only reason for the uptick in home-buying, according to Sam Khater, Freddie Mac’s Chief Economist.
“The housing market continues to steadily gain momentum with rising homebuyer demand and increased construction due to the strong job market, ebullient market sentiment and low mortgage rates.”
He also adds:
“Residential real estate accounts for one-sixth of the economy, and the improving real estate market will support economic growth heading into next year.”
Marimark Realty is a full-service real estate company in Tampa, Florida. Our focus is on providing a personalized experience for both buyers and sellers of residential and commercial properties, as well as investors.
To begin the journey of purchasing or selling your home, or purchasing commercial or investment properties, contact us at your earliest convenience.