Taking a respite from its stubborn downward trajectory for the past few years, housing inventory increased in October. However, the reversal was not enough to bring home prices down a notch.
The 3 percent annual gain in housing inventory in October is the first “meaningful” increase in inventory since December 2014, Zillow said in its October 2018 Market Report. It is the first time inventory has increased by more than 1 percent in that time.
Meanwhile, home prices appear unaffected, continuing their climb with a 7.7 percent increase over the year in October, matching September’s gain and remaining within the 7.5 percent to 8 percent range home price growth has maintained thus far for 2018, according to Zillow.
Rents, on the other hand, experienced a very slight decline of 0.1 percent, taking the median national rent down by $1 to $1,442 for the month of October.
While the October rise in inventory is notable, Zillow said, “The boost comes nowhere near making up for years of inventory declines.”
In December 2014, the last time the market experienced a rise in inventory, national housing inventory totaled 1.96 million. In October, Zillow calculated 1.62 million homes for sale.
With this in mind, perhaps it is no surprise that home values did not seem to note the change in inventory. “Possibly because inventory gains have a long way to go before they make up for years of declines, home values continue to grow steadily,” the Zillow report read.
The market with the greatest increase in inventory was also the market that charted the greatest increase in home value over the year in October. Having claimed the national spotlight of late for high home values, that accolade goes to San Jose, California, where inventory increased a notable 93.1 percent over the year in October while home prices rose 17.9 percent. The median home value in San Jose is now $1.3 million. San Jose has ranked highest among large metros for home value gains for 13 straight months, according to Zillow.
Inventory also grew in other hot California markets. Following San Jose, the second-greatest increase in inventory occurred in San Diego, where there were 43.5 percent more homes for sale than a year earlier, and San Francisco, where there were 41.6 percent more homes on the market.
On the other hand, housing inventory decreased by 15.9 percent in Las Vegas, more than any other metro. Pittsburgh, Pennsylvania followed with a 10 percent decline, followed by Virginia Beach, Virginia, with a 9.4 percent decline.
While ranking highest for falling inventory, Las Vegas claimed the second spot for home value gains with a 14.7 percent increase over the year in October. However, at just $276,200, its median home value remains well below that of San Jose.