Inventory Hits All-Time Low as Buyer Demand Explodes
Home buyers’ choices are increasingly limited. The number of homes for sale sank to an all-time low in December, dipping below 700,000 for the first time ever, according to realtor.com®’s Monthly Housing Trends Report. Home buyer demand remains high, causing bidding wars for the few homes on the market. Home prices are up by double-digit numbers compared to a year ago.
“The shortage of homes for sale has been an ongoing issue for the last couple of years, but in December, the combination of the holiday inventory slowdown and the pandemic buying trend caused it to dip to its lowest level in history,” says Danielle Hale, realtor.com®’s chief economist. “Looking forward, we could see new lows in the next couple of months as buyers remain relatively active, but a surge of new COVID-19 cases may slow the number of sellers entering the market.”
Hale says more inventory will eventually come, especially in the second half of the year. “Until then, finding a home will continue to be a top challenge for buyers across all price ranges,” she says.
The number of listings has dropped nearly 40% from a year ago. That equates to about 449,000 fewer homes for sale in December 2020 compared to December 2019, according to realtor.com® data.
The metros with the largest declines in new listings compared to a year ago are Nashville (-19.9%); Memphis, Tenn. (-18.5%); and Charlotte, N.C. (-16%).
On the other hand, San Jose, Calif., and San Francisco saw a significant year-over-year uptick in new listings in December 2020, up 123.8% and 98.9%, respectively. Several tech companies in both markets have expressed a long-term commitment to remote work, which could be prompting more residents there to move.
Overall, list prices continued to increase in December 2020. The median listing price rose 13.4% year-over-year in that month to $340,000. However, that is a slight decrease from its previous peak of $350,000 earlier in the year. The metros seeing the largest list price gains were: Austin, Texas (up 20%); Riverside-San Bernardino, Calif. (up 17.2%); and New Orleans (up 16.8%).