Deepening Inventory Shortage Slows Home Sales Even Further

This Zillow Weekly Market Report includes housing market data as of the week ending Oct. 17.

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Oct 23, 2020, 08:00 ET

SEATTLE, Oct. 23, 2020 /PRNewswire/ -- The housing market's recent record of superlatives marches on according to Zillow's Weekly Market Report¹, as prices soared to new heights and inventory reached record lows — down nearly 50% annually in some major metros. The lack of available homes and an overdue seasonal slowdown may finally be pulling pending sales down after a scorching hot few months.

Time on market falls to just 12 days, but pending sales are slowing down

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.
Demand for the few homes available is still incredibly strong, as homes typically stayed on the market for 12 days before going pending, 16 days faster than this time last year and one day faster than most weeks in August and September. Cincinnati has the shortest median time on market at 4 days.
Zillow research shows entry-level and mid-market homes priced between $186,000-$344,000 are selling at the fastest pace among all price tiers.
There are about 5 million more Americans in the key 26-35 age range today than there were in 2010, a 12% increase and a major driver of demand along with historically low mortgage rates. The median age of first-time buyers is 34.

Inventory freefall continues, now down nearly 50% in some large metros

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%).

List and sale price hikes persist, but buyers benefit from mortgage rates

Median list price rose to $346,259, up 11.7% — about $36,000 — year over year and 0.4% over last month. Annual list price growth at this time last year was 3.9%.
Median sale price rose 10.9% ($28,250) above last year to $287,750 for the week ending Sept. 5. Year-over-year sale price growth was 4.6% a year ago.
However, low mortgage rates mean these price increases are not translating to much larger monthly mortgage payments. If you purchased a home on Sept. 5 this year, at the current median price and mortgage rate, you would be paying 4.4% or $55 more per month than if you had purchased a home at the median price and mortgage rate last year².

Construction activity, existing sales stay strong in September

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.
Sales of existing homes rose at their fastest annual pace since 2010 in September, according to the National Association of Realtors. Sales rose to 6.54 million (SAAR), up 9.4% from August and 20.9% from a year ago

Metropolitan Area*	Newly Pending Sales - YoY	Newly Pending Sales - WoW	Median Days to Pending	Total For-Sale Listings - YoY	Total For-Sale Listings - WoW	Median Sale Price**	Median Sale Price - YoY**
United States	19.6%	-1.7%	12	-37.0%	-1.5%	$287,750	10.9%
New York/Newark, NY/NJ	54.1%	-2.4%	28	-20.0%	-0.5%	$462,500	6.5%
Los Angeles, CA	4.2%	-5.2%	12	-24.2%	-0.4%	$726,500	10.7%
Chicago, IL	34.6%	-3.4%	12	-28.0%	-0.7%	$268,250	11.5%
Dallas-Fort Worth, TX	28.2%	-0.9%	22	-35.3%	-2.1%	$296,750	9.2%
Philadelphia, PA	65.6%	4.4%	12	-38.3%	-0.9%	$277,725	6.8%
Houston, TX	27.1%	-1.6%	15	-30.4%	-1.4%	$264,500	7.1%
Washington, DC	66.9%	8.1%	10	-35.2%	-1.0%	$447,852	7.7%
Miami-Fort Lauderdale, FL	18.3%	-1.8%	25	-15.4%	-0.1%	$332,250	15.0%
Atlanta, GA	12.3%	-1.6%	14	-33.6%	-1.5%	$281,100	10.7%
Boston, MA	-15.3%	-12.6%	8	-32.1%	-1.8%	$527,875	12.1%
San Francisco, CA	29.0%	4.1%	11	-3.5%	0.9%	$911,812	18.1%
Detroit, MI	35.0%	0.1%	10	-40.4%	-1.6%	$223,482	10.7%
Riverside, CA	14.9%	3.8%	9	-47.0%	0.7%	$416,250	11.6%
Phoenix, AZ	25.3%	-0.5%	10	-21.4%	0.4%	$327,294	12.5%
Seattle, WA	20.4%	-1.2%	6	-29.8%	-2.1%	$536,812	10.7%
Minneapolis- St. Paul, MN	32.8%	-3.1%	17	-27.4%	-0.9%	$312,606	9.9%
San Diego, CA			9	-35.0%	0.7%	$651,000	11.0%
St. Louis, MO	23.9%	0.1%	6	-39.2%	-0.1%	$214,750	11.1%
Tampa, FL			7	-36.0%	-0.3%	$260,250	11.5%
Baltimore, MD	88.1%	7.7%	11	-46.1%	-1.9%	$321,236	5.5%
Denver, CO	23.9%	-2.3%	6	-36.8%	-2.6%	$459,369	8.2%
Pittsburgh, PA	22.1%	-6.2%	10	-32.4%	-2.0%	$198,475	6.1%
Portland, OR	25.3%	2.3%	7	-37.3%	-1.0%	$442,100	9.1%
Charlotte, NC	3.4%	-1.4%	6	-47.7%	-1.6%	$287,598	11.4%
Sacramento, CA	20.5%	0.1%	7	-43.0%	-0.7%	$472,250	11.2%
San Antonio, TX	41.1%	-1.7%	24	-29.3%	-2.6%	$255,048	8.7%
Orlando, FL			11	-19.4%	-0.8%	$285,312	7.7%
Cincinnati, OH	15.0%	-2.0%	4	-37.9%	-0.6%	$213,388	13.6%
Cleveland, OH	51.9%	0.2%	14	-40.9%	0.0%	$177,562	11.8%
Kansas City, MO	18.8%	0.5%	5	-42.8%	0.2%	$253,412	10.6%
Las Vegas, NV	17.5%	-1.4%	15	-23.0%	-0.9%	$313,875	4.2%
Columbus, OH	14.4%	0.2%	5	-41.6%	-1.0%	$235,312	14.5%
Indianapolis, IN	19.1%	-2.0%	5	-39.4%	-0.8%	$221,200	10.9%
San Jose, CA	-24.2%	2.2%	13	-14.3%	0.3%	$1,160,750	15.8%
Austin, TX	20.3%	-6.8%	6	-40.3%	-4.5%	$352,738	10.7%
Virginia Beach, VA			24	-40.6%	-0.8%	$271,750	7.9%
Nashville, TN			36	-30.0%	-1.9%	$323,898	8.3%
Providence, RI	-12.3%	-1.3%	10	-39.8%	-0.9%	$334,125	11.4%
Milwaukee, WI			38	-5.7%	-0.5%	$218,375	9.9%
Jacksonville, FL	33.4%	-3.4%	10	-42.5%	-1.5%	$265,186	5.1%
Memphis, TN	13.4%	-4.1%	5	-45.4%	0.3%	$221,597	18.1%
Oklahoma City, OK	26.2%	2.6%	8	-35.9%	-1.1%	$208,375	11.2%
Louisville, KY	12.9%	4.2%	6	-44.0%	-1.0%	$222,525	15.9%
Hartford, CT	45.0%	2.9%	8	-40.8%	-1.1%	$254,312	9.6%
Richmond, VA			5	-42.5%	-1.8%	$281,242	6.1%
New Orleans, LA	27.7%	-1.0%	11	-44.3%	-1.6%	$229,312	9.5%
Buffalo, NY	18.4%	-1.8%	11	-39.5%	-1.3%	$195,038	12.7%
Raleigh, NC	9.5%	-2.2%	5	-43.9%	-0.7%	$316,531	11.4%
Birmingham, AL	40.1%	-2.6%	7	-33.9%	-0.7%	$219,975	6.8%
Salt Lake City, UT			6	-49.9%	-4.5%	$376,375	10.4%

*Table ordered by market size

**Sale price data as of the week ending Sept. 5

¹ The Zillow Weekly Market Reports are a weekly overview of the national and local real estate markets. The reports are compiled by Zillow Economic Research and data is aggregated from public sources and listing data on Zillow.com. New for-sale listings data reflect daily counts using a smoothed, seven-day trailing average. Total for-sale listings, newly pending sales, days to pending and median list price data reflect weekly counts using a smoothed, four-week trailing average. National newly pending sales trends are based upon aggregation of the 38 largest metro areas where historic pending listing data coverage is most statistically reliable, and excludes some metros due to upstream data coverage issues. For more information, visit www.zillow.com/research/.

²Using the closest daily rates available from the Freddie Mac Primary Mortgage Market Survey. Monthly payments calculated with Zillow's Mortgage Calculator using 20% down payment.

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