While the number of for-sale listings nationwide remains down from last year, June saw a promising lift compared to the start of this year, Zillow revealed in a new report.
The overall number of listings on Zillow was down 12.2 percent year-over-year at the start of June, an improvement from the 17.5 percent shortfall recorded in January--in other words, Zillow explained, the inventory of for-sale homes has improved 5.3 percentage points year-to-date (controlling for seasonality).
Overall, annual inventory levels improved in June compared to January in 70 metros. Among the 30 largest areas covered by Zillow, Phoenix, San Diego, and Minneapolis saw the greatest alleviation from the start of the year to the start of June, improving 31.9, 14.9, and 13.5 percentage points, respectively.
""As the recovery has progressed, inventory constraints have played a major role in rapidly pushing up home values in many areas, as increasing demand for homes ran headlong into limited supply. It has always been just a matter of time before more supply came on the market to meet this demand, as homebuilders built more new homes and sellers entered the market to capitalize on recent robust appreciation in their own homes,"" said Dr. Stan Humphries, Zillow chief economist.
Twenty-nine metros saw their inventory shortages worsen between January and June; 11 of those were in the top 30 largest metros, Zillow reported. The worst areas include Las Vegas (where inventory fell 21.8 percentage points), Chicago (12.3 percentage points), and Washington, D.C. (9.8 percentage points).
Nationwide, the greatest year-over-year declines in inventory were among more expensive homes, with the availability of top- and middle-tier properties each falling 15.7 percent. The number of bottom-tier properties for sale on Zillow nationwide fell 2.5 percent in early June compared to last year.
""Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing. But a corner has been turned,"" Humphries said.
As new supply makes its way onto the market, Zillow expects the pace of home value appreciation to slow to more moderate levels ""closer to historic norms of 3 percent or 4 percent,"" he continued.