Inventory down 40% from pre-COVID level as price growth intensifies

Competition already fierce as shoppers start the buying season early

- Home value appreciation accelerates, breaking new records with 19.6% annual gain

- Inventory drops below 1 million to record-low levels -- down 40.5% from December 2019

- Rents are up 15.7% from last year, but growing at their slowest pace since March

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Jan 20, 2022, 08:00 ET

SEATTLE, Jan. 20, 2022 /PRNewswire/ -- The home shopping season appears to already be in full swing, as anxious buyers outnumbered dwindling new listings and drove inventory to record low levels in December. Limited supply is already pushing price growth up, as Zillow®'s latest market report¹ shows monthly home value appreciation accelerated for the first time since July.

Zillow logo (PRNewsfoto/Zillow Group)

In addition to not wanting to wade into such a tight market as a buyer, homeowners could be hesitant to list their houses and move due to a resurgence in coronavirus cases and employers' rising uncertainty about post-pandemic working arrangements, according to a recent Zillow survey.

"Home shoppers picked the shelves clean this December, leaving fewer active listings than ever before in the U.S. housing market," said Jeff Tucker, senior economist at Zillow. "Enough determined buyers kept up their house hunt to reignite monthly price appreciation. Rising mortgage rates could be the next potential headwind, but demand has proven persistent; neither high prices nor slim inventories have deterred buyers so far."

The typical home value is now $320,662, 19.6% above that of December 2020. The annual growth rate represents an all-time high in data dating back more than 20 years. After decelerating since July, month-over-month home value appreciation reignited, jumping from 1.2% in November to 1.4% in December.

The resurgent upward pressure on prices is likely due to astonishingly low levels of inventory this winter. After slipping in November, inventory plunged in December, dropping 11.1% in a month to a new record low of about 923,000 homes. Buyers shopping in December had 19.5% fewer homes to choose from than they did a year before, when inventory was already at a record low. Compared to December 2019, there are now 40.5% fewer homes available for sale.

One bright point for buyers is that the speed of the market has gradually slowed since the frenzied summer. In June, the typical U.S. home spent just one week on the market before going under contract. That has risen every month since, to roughly 13 days in December. This is still an incredibly short time on the market, but those extra few days do give buyers more time to assess their options.

Surge in coronavirus cases could be hampering listings, plans to move
While December typically sees a sharp decline in newly listed inventory, the 18.9% monthly drop seen last month was the largest in the past three years. The rise of the omicron variant of coronavirus could be partially responsible, pushing homeowners to wait for infection rates to subside before listing.

Workers are also less certain about their long-term working arrangements, which could impact their plans to move. A December survey² conducted by Zillow found that 52% of workers reported that their employer had announced post-pandemic work arrangements — a lower share than was reported in June 2021. One possible explanation is that the rise of new coronavirus variants has caused employers to push back in-person start dates indefinitely.

Workers whose employer has announced post-pandemic work arrangements are more likely to say they are considering a move within the next three years: 51%, versus 41% for those whose employers have not lined out a plan.

Rent growth slows
Typical rents rose a record 15.7% year over year in December, to $1,855 per month. However, monthly growth was 0.7% in December, the lowest monthly growth seen since February.

Rents grew year over year in all 50 of the nation's largest metros. Annual rent appreciation was fastest across the Sunbelt, led by Miami (29.6%), Tampa (28.6%), Phoenix (26.0%) and Las Vegas (25.1%).

Metropolitan Area*	Zillow Home Value Index (ZHVI)	ZHVI – Year- over- Year Change	ZHVI – Month- over- Month Change	For-Sale Inventory Year-over- Year Change	Median Days to Pending	Zillow Observed Rent Index (ZORI)	ZORI – Year- over- Year Change
United States	$320,662	19.6%	1.4%	-19.5%	13	$1,855	15.7%
New York, NY	$573,813	12.5%	0.6%	-25.4%	37	$2,772	16.2%
Los Angeles– Long Beach– Anaheim, CA	$868,350	17.9%	1.1%	-29.7%	13	$2,747	13.4%
Chicago, IL	$289,595	13.6%	0.9%	-22.8%	22	$1,735	10.4%
Dallas–Fort Worth, TX	$344,919	25.2%	1.7%	-24.0%	17	$1,719	17.9%
Philadelphia, PA	$313,529	14.7%	0.7%	-9.3%	13	$1,740	11.4%
Houston, TX	$278,685	19.3%	1.2%	-17.5%	14	$1,519	11.9%
Washington, D.C.	$526,296	11.9%	0.6%	-4.4%	12	$2,119	11.7%
Miami–Fort Lauderdale, FL	$397,603	22.3%	1.9%	-48.0%	18	$2,564	29.6%
Atlanta, GA	$338,243	27.4%	2.4%	-27.8%	10	$1,882	21.6%
Boston, MA	$612,114	14.3%	0.8%	-25.7%	10	$2,608	13.7%
San Francisco, CA	$1,374,739	17.3%	0.8%	-21.6%	13	$3,044	10.4%
Detroit, MI	$226,372	15.0%	0.7%	-4.8%	13	$1,384	11.0%
Riverside, CA	$534,393	26.2%	0.9%	-7.1%	14	$2,469	18.1%
Phoenix, AZ	$427,451	31.8%	1.4%	-9.5%	14	$1,858	26.0%
Seattle, WA	$718,944	22.2%	1.6%	-22.9%	6	$2,132	17.3%
Minneapolis–St. Paul, MN	$353,505	12.6%	0.8%	-6.0%	21	$1,610	5.6%
San Diego, CA	$834,199	23.6%	1.4%	-28.4%	9	$2,757	17.2%
St. Louis, MO	$224,320	14.1%	1.0%	-23.5%	8	$1,210	10.9%
Tampa, FL	$327,618	29.7%	1.7%	-24.7%	7	$1,985	28.6%
Baltimore, MD	$353,016	11.6%	0.6%	-9.6%	11	$1,793	12.1%
Denver, CO	$588,328	22.5%	1.6%	-40.3%	6	$1,873	14.8%
Pittsburgh, PA	$201,584	15.4%	0.7%	-7.8%	23	$1,289	7.8%
Portland, OR	$540,550	18.1%	0.9%	-14.7%	8	$1,810	12.8%
Charlotte, NC	$336,085	26.9%	1.8%	-23.6%	6	$1,704	19.5%
Sacramento, CA	$574,383	21.5%	0.6%	-30.5%	9	$2,195	13.0%
San Antonio, TX	$277,236	21.9%	1.8%	-28.6%	12	$1,392	15.7%
Orlando, FL	$340,123	23.5%	2.1%	-30.3%	8	$1,887	23.8%
Cincinnati, OH	$240,833	16.0%	0.9%	-12.6%	6	$1,401	10.2%
Cleveland, OH	$200,895	15.9%	0.7%	-33.5%	12	$1,209	9.7%
Kansas City, MO	$264,395	18.2%	1.2%	-7.6%	5	$1,258	9.9%
Las Vegas, NV	$395,943	26.8%	1.7%	-26.0%	10	$1,822	25.1%
Columbus, OH	$271,956	16.4%	1.2%	-7.6%	5	$1,350	10.7%
Indianapolis, IN	$244,052	19.3%	1.8%	-9.8%	5	$1,368	12.4%
San Jose, CA	$1,536,201	17.2%	1.4%	-31.4%	14	$3,007	9.2%
Austin, TX	$545,850	44.6%	2.2%	14.6%	21	$1,782	24.4%
Virginia Beach, VA	$301,273	14.7%	1.1%	-17.4%	22	$1,539	14.3%
Nashville, TN	$393,938	27.1%	2.8%		7	$1,788	18.9%
Providence, RI	$417,771	19.0%	1.0%	-31.6%	13	$1,739	12.6%
Milwaukee, WI	$250,900	13.0%	0.2%		36	$1,217	7.3%
Jacksonville, FL	$321,420	27.7%	2.1%	-21.9%	10	$1,718	24.0%
Memphis, TN	$209,211	19.5%	1.6%	-1.2%	20	$1,468	16.4%
Oklahoma City, OK	$198,154	15.7%	1.5%	-12.6%	7	$1,216	11.9%
Louisville– Jefferson County, KY	$224,727	14.1%	1.1%	-3.7%	9	$1,183	9.0%
Hartford, CT	$296,333	15.2%	0.6%	-32.9%	15	$1,583	10.5%
Richmond, VA	$305,227	14.4%	1.2%	-15.6%	6	$1,518	14.7%
New Orleans, LA	$254,376	14.4%	1.3%	-22.4%	9	$1,461	18.2%
Buffalo, NY	$226,354	19.1%	0.4%	-11.0%	12	$1,085	10.2%
Raleigh, NC	$399,332	30.7%	2.1%	-39.2%	5	$1,663	18.4%
Birmingham, AL	$219,531	16.9%	1.6%	-25.7%	6	$1,285	10.7%
Salt Lake City, UT	$553,658	27.6%	1.6%	-12.0%	8	$1,634	19.1%

*Table ordered by market size

¹ The Zillow Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research. The data in the Zillow Real Estate Market Report is aggregated from public sources by a number of data providers for 928 metropolitan and micropolitan areas, dating back to 2000. Mortgage and home loan data is 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 levels can be accessed at www.zillow.com/research/data.
² Zillow Group conducted a nationally representative survey of U.S. adults in mid-December 2021 and asked 824 adults about their plans to move, their view of current housing prices and their anticipated work arrangements.

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and ease.

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SOURCE Zillow