Could the inventory shortfall that has been impacting the national real-estate market over the past year be easing?
New data in Zillow’s Monthly Market Report suggests the inventory crunch bedeviling home-searchers may be starting to turn around, as record appreciation of home values makes it more enticing to sell.
Although continued demand for homes pushed total for-sale inventory down 1.1 percent in March, the monthly decline was the smallest seen since July, thanks to a rush of new inventory (rising 30 percent from late February to late March), which signals sellers are following the traditional pattern of listing homes in spring.
“March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand,” said Zillow economist Treh Manhertz. “With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months. That will come as welcome news to home shoppers who are seeing bidding wars and homes plucked from the market weeks faster than usual.”
National home-value appreciation pushed the accelerator closer to the floor in March, rising a record 1.2 percent month-over-month to $276,717. This is the largest monthly rise in Zillow records going back to 1996 and a roughly $3,200 jump in value from February to March for the typical home. Annual appreciation rose to 10.6 percent, the largest jump in 15 years.
The fastest monthly-home value growth was seen in Austin (2.4%), Phoenix (2.3%) and Riverside (1.9%), all accelerating from the previous month.
Annual appreciation as of March ranged from blistering highs of 20.2 percent in Phoenix to lows of 5.4 percent in San Francisco, which is still higher than historical averages.
Zillow economists forecast national home values to rise 10.4 percent over the next 12 months.