A recent Zillow market report indicates the inventory crunch vexing potential homebuyers may be ending as record appreciation of home values makes it more enticing to sell.
Although continued demand for homes sent the total for-sale inventory down 1.1 percent in March, that was the smallest monthly decline since July. Zillow attributes that to a rush of new inventory (rising 30 percent from late February to late March), thanks to the traditional increase of homes listed for sale in the spring.
“March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand,” Zillow economist Treh Manhertz said in a release. “With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months.”
Home value appreciation in March rose a record 1.2 percent month-over-month to $276,717. That was the largest monthly rise in Zillow records going back to 1996. Annual appreciation rose to 10.6 percent, the largest jump in 15 years.
The fastest monthly home-value growth was seen in Austin, Texas (2.4 percent), Phoenix (2.3 percent) and Riverside, Calif. (1.9 percent), all accelerating from the previous month. Growth is slowest in San Jose, Calif. (0.05 percent), San Francisco (0.6 percent) and Orlando, Fla. (0.7 percent).
Zillow economists forecast 6.4 million homes to sell in 2021, up 13.5 percent from 2020 and the strongest year for sales since 2006. They also expect home values to rise 10.4 percent this year.