Inventory deficit lessens while competition
over attractive listings has them selling fast
- A deficit of new listings shrank to 1.2% below last year as
total inventory rose 2.6% month over month.
- Mortgage payments have risen more than 4% in a month and almost
10% in a year.
- Listings typically are selling in 16 days — slower than last
month, but two weeks faster than in 2019.
SEATTLE, Nov. 13,
2023 /PRNewswire/ -- Despite mortgage rates reaching
23-year highs, low inventory levels are spurring surprisingly
strong competition, according to Zillow's latest market
report1. Depleted inventory stocks are gradually
recovering, and price appreciation is slowing, but demand has
remained resilient, and attractive, appropriately priced listings
are moving quickly.
"With mortgage rates nearing 8% in October, the U.S. housing
market continues to turn cooler, with inventory rising, and
appreciation decelerating. As interest rates rose, some pent-up
sellers appear to have been shaken free of waiting for rates to
drop. New listings have nearly escaped the red annually and are
trending out of a mortgage rate lock-induced hole," said
Skylar Olsen, Zillow chief
economist. "A record number of households in prime home-buying ages
are providing buyers, despite the headwinds."
The key number for any potential buyer or seller is the mortgage
rate, which marched skyward through October and finished the month
near 8%. Rate hikes pushed monthly payments on a typical U.S. home
up by more than 4% from September to October. At $1,991, monthly payments2 are up
almost 10% compared to last October and have nearly doubled in two
years.
The Zillow Home Value Index puts the typical U.S. home value at
$347,972, up 2.3% from last year. A
0.3% monthly decline in values in October is a tad steeper than the
0.1% dip from August to September, and shows a slightly faster
deceleration than pre-pandemic norms.
Home values fell in October in 40 of the top 50 markets, with
the largest declines in Austin
(-1.5%), Minneapolis (-1%) and
New Orleans (-1%). The largest
monthly growth was in sunny (and costly) Miami (0.5%), San
Jose (0.4%) and San Diego
(0.2%).
Annual appreciation is strongest in Hartford (11.4%), Milwaukee (8.5%), Providence (7%) and Boston (6.8%) — all metros that avoided
extreme early-pandemic growth spurts.
Inventory still depleted, but slowly recovering
New
listings fell nearly 5% from September, a smaller drop than would
be expected seasonally. But levels were still the lowest to hit the
market in any October recorded by Zillow (since 2018).
Despite this, the longstanding deficit in new listings is
generally shrinking as some sellers accept that high rates are
sticking around. A shortfall of only 1.2% from the year prior is
the smallest since May 2022, and a
deficit of 19% compared to pre-pandemic levels is much improved
from a trough of -35% in April.
There were still a massive 39% fewer homes for sale in October
than pre-pandemic norms, but that's an improvement over the 46%
deficit in May. Total inventory climbed 2.6% nationally from
September to October — a result of fewer sales and an unexpectedly
small September dropoff in new listings.
As sellers come to grips with higher-for-longer mortgage rate
expectations, "rate lock" is likely to ease a bit and encourage
sales — about 70% of sellers turn around and buy. Seasonally
adjusted sales counts, down 31% in July from normal levels, are now
improved to down 26% in October3.
Competition easing, but still tight for attractive
listings
Rising rates and recovering inventory translate to
fewer buyers in bidding wars and more sellers cutting list prices.
In October, 25.2% of sellers cut their list price, up from 23.9% in
September. The share of sales that closed for higher than list
price fell from almost 37% in August to 34% in September, but
that's still well above pre-pandemic norms of the low- to
mid-20s.
But attractive listings are still moving fast. Listings that
sold in October typically did so in 16 days – one day longer than
in September, but two days faster than last year and two weeks
faster than in 2019.
Metropolitan
Area*
|
October
Zillow Home
Value Index
(ZHVI) (Raw)
|
ZHVI
Change,
Year
over
Year
(YoY)
|
ZHVI
Change,
Month
over
Month
(MoM)
|
Median
Days to
Pending Change,
YoY
|
Share of
Listings
with a
Price
Cut
|
New
inventory change,
YoY
|
Total
Inventory Change,
YoY
|
United
States
|
$347,972
|
2.3 %
|
-0.3 %
|
-2
|
25.2 %
|
-1.2 %
|
-5.9 %
|
New York, NY
|
$629,445
|
3.7 %
|
0.2 %
|
-6
|
15.5 %
|
-9.8 %
|
-22.4 %
|
Los Angeles,
CA
|
$912,049
|
4.7 %
|
0.1 %
|
-7
|
19.6 %
|
-5.1 %
|
-21.8 %
|
Chicago, IL
|
$306,751
|
5.3 %
|
-0.2 %
|
-5
|
25.9 %
|
-4.6 %
|
-19.9 %
|
Dallas, TX
|
$368,645
|
-1.6 %
|
-0.7 %
|
3
|
33.4 %
|
2.3 %
|
8.4 %
|
Houston, TX
|
$301,794
|
-1.2 %
|
-0.7 %
|
3
|
28.6 %
|
-4.2 %
|
0.2 %
|
Washington,
DC
|
$543,054
|
3.2 %
|
-0.3 %
|
-6
|
25.3 %
|
-13.4 %
|
-26.3 %
|
Philadelphia,
PA
|
$345,783
|
6.1 %
|
-0.2 %
|
-1
|
24.8 %
|
-6.6 %
|
-13.7 %
|
Miami, FL
|
$475,761
|
6.0 %
|
0.5 %
|
-2
|
22.2 %
|
11.8 %
|
5.6 %
|
Atlanta, GA
|
$374,449
|
1.9 %
|
-0.2 %
|
2
|
28.2 %
|
-1.7 %
|
-11.3 %
|
Boston, MA
|
$659,680
|
6.8 %
|
-0.1 %
|
-3
|
21.9 %
|
-9.3 %
|
-18.9 %
|
Phoenix, AZ
|
$451,934
|
-2.4 %
|
0.1 %
|
-18
|
31.7 %
|
-4.4 %
|
-32.6 %
|
San Francisco,
CA
|
$1,127,374
|
-0.6 %
|
-0.4 %
|
-6
|
21.5 %
|
-5.4 %
|
-17.3 %
|
Riverside,
CA
|
$562,606
|
1.9 %
|
0.2 %
|
-10
|
22.7 %
|
-5.2 %
|
-21.6 %
|
Detroit, MI
|
$241,926
|
4.3 %
|
-0.4 %
|
-5
|
25.0 %
|
-9.5 %
|
-19.4 %
|
Seattle, WA
|
$704,655
|
0.4 %
|
-0.5 %
|
|
28.2 %
|
-15.5 %
|
-28.5 %
|
Minneapolis,
MN
|
$365,378
|
0.9 %
|
-1.0 %
|
-1
|
29.9 %
|
-7.7 %
|
-10.3 %
|
San Diego,
CA
|
$903,946
|
6.5 %
|
0.2 %
|
-8
|
22.9 %
|
-3.2 %
|
-26.3 %
|
Tampa, FL
|
$376,834
|
0.3 %
|
0.0 %
|
-2
|
35.5 %
|
6.2 %
|
1.4 %
|
Denver, CO
|
$573,866
|
-0.6 %
|
-0.6 %
|
|
33.1 %
|
2.2 %
|
-0.3 %
|
Baltimore,
MD
|
$373,192
|
4.1 %
|
-0.4 %
|
-2
|
27.9 %
|
-1.8 %
|
-13.3 %
|
St. Louis,
MO
|
$241,975
|
5.1 %
|
-0.5 %
|
0
|
26.1 %
|
-0.3 %
|
2.2 %
|
Orlando, FL
|
$389,868
|
1.8 %
|
0.0 %
|
-3
|
30.2 %
|
6.9 %
|
-0.3 %
|
Charlotte,
NC
|
$372,737
|
1.3 %
|
-0.1 %
|
-2.5
|
24.7 %
|
-7.3 %
|
-4.6 %
|
San Antonio,
TX
|
$286,357
|
-2.9 %
|
-0.9 %
|
16.5
|
33.4 %
|
-9.7 %
|
14.0 %
|
Portland, OR
|
$536,648
|
-0.2 %
|
-0.7 %
|
2
|
30.1 %
|
-13.2 %
|
-11.6 %
|
Sacramento,
CA
|
$565,137
|
-1.3 %
|
-0.4 %
|
-12
|
26.7 %
|
-12.0 %
|
-30.8 %
|
Pittsburgh,
PA
|
$206,862
|
3.5 %
|
-0.5 %
|
-2
|
29.3 %
|
-4.3 %
|
-11.5 %
|
Cincinnati,
OH
|
$271,320
|
5.2 %
|
-0.6 %
|
1
|
28.1 %
|
-6.2 %
|
-8.0 %
|
Austin, TX
|
$457,662
|
-9.2 %
|
-1.5 %
|
11.5
|
30.6 %
|
-6.2 %
|
-4.8 %
|
Las Vegas,
NV
|
$407,838
|
-2.6 %
|
0.1 %
|
-22
|
24.5 %
|
-11.9 %
|
-42.1 %
|
Kansas City,
MO
|
$293,286
|
5.2 %
|
-0.4 %
|
0
|
30.5 %
|
-7.5 %
|
-7.0 %
|
Columbus, OH
|
$301,588
|
4.7 %
|
-0.5 %
|
0
|
31.3 %
|
-10.7 %
|
-10.4 %
|
Indianapolis,
IN
|
$269,854
|
2.0 %
|
-0.5 %
|
2
|
35.5 %
|
-8.3 %
|
-5.1 %
|
Cleveland,
OH
|
$217,199
|
5.6 %
|
-0.3 %
|
-2
|
26.1 %
|
-1.3 %
|
-10.6 %
|
San Jose, CA
|
$1,494,974
|
5.5 %
|
0.4 %
|
-15
|
19.1 %
|
3.5 %
|
-15.4 %
|
Nashville,
TN
|
$432,241
|
-1.1 %
|
-0.3 %
|
-1
|
33.6 %
|
-17.5 %
|
-13.3 %
|
Virginia Beach,
VA
|
$334,645
|
5.9 %
|
-0.4 %
|
3
|
23.6 %
|
-5.9 %
|
-9.1 %
|
Providence,
RI
|
$455,996
|
7.0 %
|
0.0 %
|
-1.5
|
21.6 %
|
0.4 %
|
-15.1 %
|
Jacksonville,
FL
|
$353,450
|
-1.9 %
|
-0.3 %
|
12
|
31.8 %
|
-10.2 %
|
-5.5 %
|
Milwaukee,
WI
|
$328,245
|
8.5 %
|
-0.6 %
|
-7
|
21.5 %
|
7.7 %
|
-2.8 %
|
Oklahoma City,
OK
|
$227,269
|
3.3 %
|
-0.4 %
|
4
|
29.0 %
|
-0.7 %
|
10.4 %
|
Raleigh, NC
|
$435,076
|
-0.2 %
|
-0.3 %
|
|
34.1 %
|
-8.8 %
|
-18.5 %
|
Memphis, TN
|
$233,352
|
-1.0 %
|
-0.7 %
|
9
|
27.2 %
|
-0.9 %
|
18.0 %
|
Richmond, VA
|
$350,197
|
4.7 %
|
-0.5 %
|
0
|
24.3 %
|
-3.9 %
|
-12.0 %
|
Louisville,
KY
|
$247,684
|
4.1 %
|
-0.4 %
|
0
|
30.0 %
|
2.0 %
|
0.0 %
|
New Orleans,
LA
|
$240,461
|
-9.0 %
|
-1.0 %
|
12
|
26.9 %
|
-9.5 %
|
12.2 %
|
Salt Lake City,
UT
|
$534,901
|
-0.7 %
|
-0.2 %
|
-2
|
36.3 %
|
-11.8 %
|
-14.6 %
|
Hartford, CT
|
$341,293
|
11.4 %
|
0.1 %
|
-1
|
16.5 %
|
-5.7 %
|
-9.3 %
|
Buffalo, NY
|
$249,902
|
5.5 %
|
-0.3 %
|
0
|
20.6 %
|
8.9 %
|
-5.1 %
|
Birmingham,
AL
|
$248,888
|
0.1 %
|
-0.8 %
|
4
|
23.8 %
|
-8.1 %
|
-0.9 %
|
*Table ordered by market
size
1 The Zillow® Real Estate Market Report is
a monthly overview of the national and local real estate markets.
The reports are compiled by Zillow Research. For more information,
visit www.zillow.com/research.
2 Monthly mortgage payment represents the principle and
interest on a new purchase of a home priced at October's Zillow
Home Value Index level of $347,972,
using a 30-year, fixed-rate mortgage.
3 October sales from Zillow Nowcast, earlier sales are
observed closed sales on Zillow.
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is reimagining real estate to make home a
reality for more and more people. As the most visited real estate
website in the United States,
Zillow and its affiliates help people find and get the home they
want by connecting them with digital solutions, great partners, and
easier buying, selling, financing and renting
experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®; Zillow Premier Agent®; Zillow Home Loans℠; Trulia®; Out
East®; StreetEasy®; HotPads®; ShowingTime+℠; and
Spruce®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a
Zillow affiliate.
(ZFIN)
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SOURCE Zillow