Inventory Rising Among Most Expensive Homes, but Low-Priced Homes Still Scarce

Buyers searching for real estate will find more homes for sale overall, but supply of lower-priced homes is growing more slowly than high-priced homes in most of the country.

-Inventory of all for-sale homes nationwide rose 15.8 percent year-over-year.

-The number of homes for sale in the bottom price tier rose less over the last year than the number in the top price tier in most U.S. metros.

-The U.S. Zillow Home Value Index rose to $177,500 in October, up 6.4 percent year-over-year, the slowest annual pace in the last 12 months.

News provided by

Zillow, Inc.

Nov 21, 2014, 08:00 ET

SEATTLE, Nov. 21, 2014 /PRNewswire/ -- The number of homes for sale continued to increase across the U.S. in October, a good sign for buyers – but with a catch. In many parts of the country, supply increased more among the most expensive homes than low- and mid-priced homes, according to the October Zillow® Real Estate Market Reports[i].

The inventory of for-sale homes[ii] in the bottom home-price tier rose year-over-year in 68.3 percent of the 353 total metro areas analyzed by Zillow, while inventory in the top home price tier rose in 82.2 percent, or 290 of the 353 markets analyzed. Inventory of all homes for sale nationwide increased by 15.8 percent year-over-year.

In Denver, there were almost four times as many homes available for sale in the upper price tier (priced at $357,900 or more) than there were homes priced in the lowest price tier (less than $219,000).

The same was true in many other markets. Dallas, Atlanta, Phoenix and Nashville had at least two times more homes for sale in the top tier than the bottom tier.

In 25 of the 35 largest metros analyzed, there were more homes for sale this October than last October in all three price tiers. In 14 of those metros, the increase in number of homes for sale was in the double digits in all price tiers.

"Depending on their finances, it's likely that individual buyers in the same market might be having completely different home buying experiences. Even as conditions improve for buyers overall, it remains a tough row to hoe for first-time buyers and lower-income buyers, especially compared to their more well-off contemporaries," said Zillow Chief Economist Dr. Stan Humphries. "We expect more demand to come from the lower end of the market in coming years as millennials overtake Generation X as the largest home-buying demographic. As this happens, builders will be forced to build for these more entry-level buyers, and inventory at the bottom tier should improve, however slowly."

Overall, median U.S. home values rose 6.4 percent from October 2013 and 0.4 percent from September, to a Zillow Home Value Index (ZHVI)[iii] $177,500. Both monthly and annual home value gains were well below the faster paces recorded earlier in the year. Rising inventory and slowing home-value growth are two signs that the housing market is beginning to level off across the nation.

As the market has cooled, buyers looking for less expensive homes did find some relief in the hottest metro areas, including San Diego, Los Angeles and the Bay Area. In San Francisco, the number of low-priced homes on the market rose by 39 percent, but there were fewer high-priced homes on the market. While inventory was still tight there in October, the homes that were available spread evenly across the price spectrum.

National rents were up in October from a year ago, up 3.5 percent to a Zillow Rent Index (ZRI)[iv] of $1,337. Month-over-month, national rents were flat from September.

	Zillow Home Value Index		Change in Inventory
Metropolitan Area	October 2014 ZHVI	Year-Year % Change in ZHVI	YoY % Change in For-Sale Inventory, Overall	YoY % Change in For-Sale Inventory, Bottom Tier	YoY % Change in For-Sale Inventory, Middle Tier	YoY % Change in For-Sale Inventory, Top Tier
United States	$177,500	6.4%	15.8%	N/A	N/A	N/A
New York, NY	$381,600	5.0%	20.8%	19.7%	17.3%	25.1%
Los Angeles, CA	$530,400	7.1%	19.8%	27.3%	24.7%	10.5%
Chicago, IL	$188,400	6.4%	18.8%	6.5%	25.1%	23.2%
Dallas-Fort Worth, TX	$149,300	6.3%	-7.9%	-12.4%	-18.3%	0.5%
Philadelphia, PA	$202,900	5%	10.2%	15.9%	3.2%	12.6%
Houston, TX	$151,200	12.2%	-14%	N/A	N/A	N/A
Washington, DC	$361,100	5.2%	44.6%	52.9%	52.9%	31%
Miami-Fort Lauderdale, FL	$206,000	14.1%	30.1%	48.7%	29.4%	22.7%
Atlanta, GA	$152,900	13.8%	18.4%	19.5%	28.0%	11.9%
Boston, MA	$361,600	4.1%	16.7%	6%	18.2%	25%
San Francisco, CA	$691,100	7.3%	14.2%	39.2%	4.8%	3.6%
Detroit, MI	$113,700	10.9%	22.9%	2.7%	31.5%	34.7%
Riverside, CA	$280,400	11.8%	41.5%	56.8%	54.3%	24.5%
Phoenix, AZ	$198,500	3.7%	16.1%	1.8%	16.7%	23.9%
Seattle, WA	$334,600	6.4%	19.9%	29.4%	21.7%	10.6%
Minneapolis-St Paul, MN	$209,500	5.3%	37.6%	16.2%	42.4%	49.9%
San Diego, CA	$463,800	5.3%	40.5%	56.9%	34.2%	34.9%
St. Louis, MO	$129,300	1.7%	10.8%	-4.1%	15.0%	20.2%
Tampa, FL	$145,600	10.6%	14.3%	6.7%	18.7%	16.2%
Baltimore, MD	$242,500	2.8%	32.2%	31.5%	37.6%	28.4%
Denver, CO	$270,300	10%	-18%	-31.5%	-37%	-0.2%
Pittsburgh, PA	$125,300	7.3%	-0.2%	8.0%	-5.8%	-1.9%
Portland, OR	$275,100	5.7%	9.8%	22.3%	7.9%	4.4%
Sacramento, CA	$327,600	8.2%	41.7%	42.5%	36.7%	44.9%
San Antonio, TX	$144,300	5.3%	-0.7%	N/A	N/A	N/A
Orlando, FL	$168,400	12.3%	46.4%	54.6%	47.9%	41.7%
Cincinnati, OH	$136,700	4.8%	2.5%	-4.2%	0.8%	11.1%
Cleveland, OH	$121,100	3.4%	6.5%	4.3%	0.3%	14.7%
Kansas City, MO	$137,300	5.5%	1%	-11.7%	-2.3%	17.4%
Las Vegas, NV	$183,300	12.2%	36.6%	85.5%	25.1%	25.9%
San Jose, CA	$821,800	9.8%	5.7%	7.8%	0.3%	9%
Columbus, OH	$144,500	6.9%	-9.3%	-14.4%	-13.4%	-0.6%
Charlotte, NC	$156,600	5.8%	-8.2%	-2.8%	-13.8%	-6.9%
Indianapolis, IN	$127,900	-1.5%	4.9%	-8.3%	1%	20%
Austin, TX	$218,800	11.2%	-8.2%	N/A	N/A	N/A

About Zillow:
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgages, Zillow Rentals, Zillow Digs®, Postlets®, Diverse Solutions®, Mortech®, HotPads™, StreetEasy® and Retsly™. The company is headquartered in Seattle.

Zillow.com, Zillow, Zestimate, Postlets, Mortech, Diverse Solutions, StreetEasy and Digs are registered trademarks of Zillow, Inc. HotPads and Retsly are trademarks of Zillow, Inc.

[i] The Zillow Real Estate Market Reports are a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Real Estate Research. For more information, visit www.zillow.com/research/. The data in Zillow's Real Estate Market Reports are aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas dating back to 1996. Mortgage and home loan data are typically recorded in each county and publicly available through a county recorder's office. All current monthly data at the national, state, metro, city, ZIP code and neighborhood level can be accessed at www.zillow.com/local-info/ and www.zillow.com/research/data.
[ii] Each week, a count of the number of single-family, condominium and cooperative housing units listed for sale on Zillow is taken. The median of these values within a month is calculated as the monthly value. Because inventory can be seasonal, a seasonally adjusted value is reported using a standard STL procedure. This seasonally adjusted series is then smoothed using a three-month rolling average. More information is available at www.zillow.com/research.
[iii] The Zillow Home Value Index is the median estimated home value for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. It is expressed in dollars, and seasonally adjusted.
[iv] The Zillow Rent Index is the median Rent Zestimate® (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow's database, regardless of whether they are currently listed for rent. It is expressed in dollars.

SOURCE Zillow, Inc.