Photo: Robert Clark
As spring homebuying season gets underway in the US, national inventory of existing homes may finally be showing some green shots after three years. (Green shots refer to signs of economic recovery during an economic downturn.)
And while March was a bit of an upswing for the existing home submarket, single-family homes remain in extremely short supply, according to a report released earlier this week by the listing site Zillow.
Nationally, existing home sales rose 1.1 percent monthly in March to 5.6 million units at a seasonally adjusted annual rate (SAAR). March marked the second consecutive month of unexpectedly strong sales following a string of weak showings. Sales were still 1.2 percent below where they were a year ago at this time.
“After dipping sharply last fall and over the winter, existing home sales have now recovered to roughly the same range where they were in late 2016 and early 2017,” writes Zillow in the digital release.
Over the last month, existing home for sale inventory rose 0.4 percent to 1.73 million units (SAAR) in March. However, inventory was down 7.4 percent compared to last year. March marked the 34th consecutive month of annual inventory declines.
The number of existing homes for sale has increased on a monthly basis since January 2018 — the longest streak of monthly increases since spring 2015. However, the numbers can be somewhat misleading for eager buyers.
“The increase in inventory in March was driven by a combination of downward revisions to the previous month’s inventory and more condos and coops on the market rather than single-family homes — not quite the unambiguous gains the market needs right now,” writes Zillow.
Meantime, inventory of single-family homes fell 0.2 percent monthly in March to 1.54 million units (SAAR), down 7.2 percent from last year.
Real estate experts have been saying for awhile now that inventory can’t get much lower and yet inventory keeps falling, notes Zillow Economic Research Director Aaron Terrazas.
“The larger puzzle with existing home inventory in particular is that home sellers are listing homes for sale at roughly the same rate as they have in the past, but overall inventory continues to fall,” Terrazas tells BuzzBuzzNews.
This is happening because of the other side of the supply and demand coin: demand is incredibly high, and buyers are scooping up what homes are available at a record pace, making inventory “appear very limited at a given point in time,” explains Terrazas.
Finally, the median seasonally adjusted price of the typical existing home surged to $257,100 in March — a new all-time record. This was up 5.8 percent from last year at the same time and up 0.6 percent from February. The median price in March was 11.5 percent, or $25,400, above the pre-crisis peak recorded in October 2005.
Click here to read the entire release.