If there’s a compact way to sum up the 2016 housing market, it would be the words “low inventory.” In a year’s-end look at the U.S. housing market, Trulia found that no other issue dictated the course and nature of market as much as a lack of places to buy.
At its most basic, low inventory yields high competition, and, therefore, escalating prices. And prices are indeed escalating. Just last week, the September S&P CoreLogic Case-Shiller Home Price Indices reported that home prices had increased over-the-year for 53 months in a row and had clawed their way back up to within 20 percent below pre-recession peaks when accounting for inflation.
Trulia found that over the course of 2016, lower-priced, or starter homes, saw the biggest decrease in inventory across all markets, nearly 11 percent down from 2015. Trade-up homes dropped by 9.2 percent, while inventory among upper-end homes dropped 3.6 percent. Matt Vos, a real estate agent in Denver, said his city was a prime example of the division between less-expensive and more-expensive properties.
“For homes below $600,000, it was definitely a seller’s market,” Vos said. “For homes more than $700,000, it was more of a buyer’s market.”
Salt Lake City, San Antonio, and Austin have seen enormous drops in the availability of starter home inventory since 2012. Since then, Trulia reported, Salt Lake City’s starter inventory has dropped 88 percent. San Antonio’s has dropped 86 percent, and Austin’s 82 percent.
As it’s been reported all year, buyers of first homes in major California cities are effectively priced out of the market.
“First-time buyers in the metro areas of Los Angeles, Oakland, Orange County, Sacramento, San Francisco, and San Jose used between 23 percent and 29 percent more of their income to buy a home in 2016 than they did in 2012,” Trulia reported.
However, not all inventories dropped this year, not even in California. According to Trulia, markets in Cape Coral, Miami, Fort Lauderdale, and West Palm Beach saw significant numbers of new homes for sale. In California, there were 24 percent more homes available in Fresno this year than in 2015.
“Bakersfield, San Diego, and San Jose also saw housing inventory increase,” Trulia reported.” Oklahoma City also saw inventory increase.