Trulia: Inventory Drops Again, But Demand For Starter Homes Also Falling In Many Markets
Inventory continues to drop for all homebuyers, but there are signs demand is waning for the few starter homes out there.
SAN FRANCISCO, June 21, 2016 /PRNewswire/ -- Trulia, a leading destination for homebuyers and renters, today released its latest quarterly edition of the Trulia® Inventory and Price Watch. This quarter's report offers buyers and sellers deeper insight into the change in supply and affordability of homes over the past year, within three different segments: starter homes, trade-up homes, and premium homes. Based on the for-sale homes listed on Trulia, this report calculates housing inventory within each segment nationally and in the 100 largest U.S. metros, from April 1, 2015 to April 1, 2016. For the full report and methodology, see here.
Starter and Trade-Up Home Inventory Show Double Digit Dips, while Premium Inventory Remains Flat The spring house-hunting season brought very little relief for homebuyers, as the national inventory of all homes has dropped by about 6% over the past year. The number of starter and trade-up homes on the market nationwide has dropped by 12.3% and 11.5%, respectively. Meanwhile, decreased inventory continues to take a toll on the affordability of all home segments. Buyers will need to set aside between 0.5% and 1.3% more of their income towards a home purchase than they did last year. However, starter affordability has been hit the hardest, and as a result, starter homebuyers need to dedicate 1.3% more of their monthly income to buy a starter home.
| 2016 Q2 National Inventory Monitor |
||||||||
| Housing Segment |
2016 Q2 Inventory |
Change, 2015 Q2 - 2016 Q2 |
||||||
| Median |
Share |
Inventory |
% of Income Needed to Buy Median Price Home in Segment |
% Change in Median List Price |
Percentage Point Change in Share |
% Change in Inventory |
Additional Share of Income Needed to Buy a Home in Segment (Percentage Point Change) |
|
| Starter |
$157,072 |
23.9% |
244,080 |
37.5% |
6.4% |
-1.7 pts |
-12.3% |
+1.3 pts |
| Trade-Up |
$275,262 |
24.8% |
253,192 |
25.0% |
5.9% |
-1.5 pts |
-11.5% |
+0.8 pts |
| Premium |
$585,334 |
51.3% |
523,655 |
13.7% |
7.9% |
+3.1 pts |
-0.2% |
+0.5 pts |
| Note: National numbers based on 100 largest U.S. metro areas. Share is the percent of for-sale homes that fall into each segment, which is defined separately for each metro. Median price for each segment is the stock-weighted average of the median price of each segment in each metro. Some point change estimates may be slightly different than stated values because our differing procedure occurs before rounding. |
||||||||
Big Drops in Inventory Not Necessarily Affecting Home Affordability
In places like Portland, Ore., Dallas, and Colorado Springs, Colo., large decreases in starter home inventory has led to double-digit increases in starter home prices. However, demand may be waning for the few starter homes that are on the market. In 20 of the 74 metros where starter inventory has dropped, starter home prices have also fallen over the past year, which suggests there are fewer buyers looking for such homes.
Starter Home Unaffordability Spreading Beyond California
In the last edition of Trulia's Inventory and Price Watch, nine of the 10 metros experiencing the largest drop in starter home affordability over the past four years were located in California. Over the past year, starter homebuyers in the Mountain West, Pacific Northwest, and Gulf Coast of Florida are also beginning to feel the pinch. While a California city – Oakland – still tops the list, starter homebuyers need to spend 8.1% more of their income to buy a home this year in Denver, 6.1% and 5.2% more in Seattle and Portland, Ore., and 5.5% and 4.8% more in Cape Coral, Fla., and Sarasota, Fla, respectively.
| Markets with Largest Decrease in Starter Home Affordability |
|||
|
U.S. Metro |
% of Starter-Home |
Additional Share of Income |
|
| Median Starter |
Buyer Income Needed |
Needed to Buy Median Price |
|
| Home List Price, |
to Afford Median Price |
Starter Home in 2016 Q2 vs. 2015 Q2 |
|
| 2016 Q2 |
Starter Home, 2016 Q2 |
(Percentage Point Change) |
|
| Oakland, CA |
$399,498 |
73.9% |
+8.3% pts |
| Denver, CO |
$225,900 |
42.1% |
+8.1% pts |
| San Jose, CA |
$601,000 |
88.9% |
+7.2% pts |
| Sacramento, CA |
$224,667 |
56.0% |
+6.3% pts |
| Seattle, WA |
$271,633 |
51.6% |
+6.1% pts |
| San Francisco, CA |
$734,167 |
113.6% |
+6.0% pts |
| Los Angeles, CA |
$333,967 |
89.4% |
+5.6% pts |
| Cape Coral-Fort Myers, FL |
$124,583 |
31.7% |
+5.5% pts |
| Portland, OR |
$216,117 |
52.1% |
+5.2% pts |
| North Port-Sarasota- |
$139,300 |
35.9% |
+4.8% pts |
| NOTE: Among the 100 largest U.S. metro areas. % change in starter home affordability is the additional |
|||
QUOTES FROM TRULIA'S CHIEF ECONOMIST RALPH MCLAUGHLIN:
- "While falling inventory continues to make it difficult for buyers to find homes, those looking to buy their first home will face less competition than last year in many markets."
- "While California still reigns as the most expensive place to buy a starter home, affordability problems in the Pacific Northwest and Gulf Coast of Florida are starting to mimic those in the Golden State."
| 2016 RELEASE SCHEDULE |
|
| Report |
Release Date |
| Q3 (July – September) 2016 |
Wednesday, September, 21, 2016 |
| Q4 (October – December) 2016 |
Tuesday, December, 13, 2016 |
About Trulia
Trulia® is a vibrant home shopping marketplace, focused on giving homebuyers, sellers, and renters the information they need to make better decisions. On mobile and the Web, Trulia provides house hunters with insights and unique information about properties, neighborhoods, and real estate agents. Additionally, Trulia offers data and information about schools, crimes, commute times, and the real estate market.
Launched in 2005, Trulia is based in San Francisco and is owned and operated by Zillow Group (NASDAQ: Z and ZG).
Trulia is a registered trademark of Trulia, LLC.
MEDIA CONTACT:
Cecilia Xia
[email protected]
415-400-7222
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SOURCE Trulia
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