Zillow: Inventory Shortage Shrinks to Record Low

The lack of homes available for sale is at a new low, according to statistics released from Zillow that found a 7.5 percent year-over-year decline in inventory during December, which bottomed out at the lowest level since the company began tracking this data in 2013.

 

Zillow reported that housing inventory fell year-over-year in 31 of the 35 largest housing markets, most dramatically in Seattle (down 28.5 percent), San Diego (down 23 percent) and Sacramento (down 21.7 percent). The four major markets that bucked the trend were San Antonio (up 8.1 percent), Detroit (up 7.6 percent), Atlanta (up 1.8 percent) and Chicago (up 0.6 percent).

 

While inventory slumped, home values increased by 3.7 percent in 2019 to $244,054. Home values grew the most in Phoenix (up 6.5 percent), Columbus (up 5.9 percent) and Charlotte (up 5.9 percent) in 2019 and fell in only San Jose (down 6.4 percent) and San Francisco (down one percent).

 

"The end of 2019 looks a whole lot different than we might have expected at the beginning of the year," said Skylar Olsen, director of economic research at Zillow. "A year ago, a combination of a government shutdown, stock market slump and mortgage rate spike caused a long-anticipated inventory rise. That supposed boom turned out to be a short-lived mirage as buyers came back into the market and more than erased the inventory gains. As a natural reaction, the recent slowdown in home values looks like it's set to reverse back to accelerating growth right as we head into home shopping season with demand outpacing supply."

 

While inventory was in decline, the S&P/Experian Consumer Credit Default Indices reported the first mortgage default rate in December rose three basis points 0.80 percent; one year ago, the rate was 0.67 percent.

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