Housing Market to Get Inventory Boost Soon?

Key Highlights

Realtor.com study expects 10% of nation’s home to be listed this year

• Study finds that 58% of those homes valued below $350,000

Good News Regarding Housing Inventory?

A recently released study from realtor.com found that many homeowners who have opted not to list their homes are getting ready to do so.

Realtor.com expects that approximately 10% of America’s homes will hit the market this year.  (Typically, 8% of the country’s homes are listed in any calendar year.)

Additionally, realtor.com’s study indicated that 58% of those houses are valued below $350,000.

Such Indications Very Much Welcomed by Economists, Agents and Buyers Alike

Record-low housing inventory has been strangling the housing market for years now.  This year, inventory is down to just a two-month supply whereas a “normal” housing market has a supply of six months.

The level of entry-level housing, most often the level by which first-time homebuyers enter the housing market, has been especially hard hit by this record low housing supply.

George Ratiu, senior economist with realtor.com, said, “The fact that we’re seeing such a significant potential in entry-level and affordable inventory getting ready to come to market is to me a really encouraging sign.”

Realtor.com’s Study Data Substantiated by Recent Data from Zillow

Data from the Zillow Group underlines realtor.com’s findings.

Zillow indicated a +30% jump in new inventory from late February to late March in its market analyses.

Inventory Issue Not Solvable Overnight

Because this drastic supply shortage of houses for sale has been brewing since the Great Recession, there will be no quick fix to the housing shortage in this country despite this good inventory news.

According to Ratiu, realtor.com’s economist, inventory levels were shy of 3.8M homes.  Freddie Mac agreed with that number and Black Knight recently indicated that there are approximately -40% fewer homes for sale this year compared with last year at the time.

But, this is good news.  Better to be able to take small steps than taking no steps at all, right?  These small steps could lead to a less competitive market and a slower, more moderate increase in rising home prices.

Thanks to realtor.com, Zillow and Bloomberg.

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