Diminishing inventory can often force buyers to bump shoulders as they race against the clock to appease sellers.
In its June market report, Zillow says the average selling time was one full week faster than last year, further exemplifying how competitive the U.S. market has grown.
The supply of homes dropped 5 percent year-over-year in June, Zillow says. At its highpoint in 2011, the supply was a staggering 38 percent higher than it is now.
Zillow Research
Due in part to diminishing supply, the average selling time was 78 days until closing in June. In 2010, the average time on the market was 10 months. While shorter sales can make sellers optimistic, buyers without big budgets also have less leverage when it comes to landing their perfect properties.
Adding to the inventory problem is the fear many sellers hold about becoming a buyer again, says Zillow Chief Economist Svenja Gudell. And trade-up seller hesitation is adding to the cycle even further, the report says.
Coastal competition rises, except in San Francisco
In New York/Northern New Jersey, the median market time was remarkably higher than most metro areas, at 157 days, according to Zillow, which is down six days since last year. Inventory in and around NYC declined 9.2 percent year-over-year in June and median home value was $386,800.
Los Angeles homes moved off the market at a median 64 days in June, the same as last year, but inventory dropped almost 8 percent. The median home value in the L.A. metro reached $572,400 in June.
Washington D.C. saw a five-day drop, hitting a median 68 days on the market in June. Adding to the problem, the nation’s capital posted an annual 12.1 percent drop in inventory. The median home value was $368,700.
Baltimore’s median selling time was 99 days in June, which is seven days fewer from last June. Despite being a hotspot for foreclosures, inventory dropped 11.6 percent year-over-year in Baltimore, and the median home value was $251,400.
San Francisco Inventory
Remaining tight, San Francisco’s median time on the market was the lowest of the top metros, at 43 days. List-to-close time jumped one day year-over-year, and inventory increased by 4.4 percent in June. The median value was still steep, at $812,300.
Midwest, South average selling time varies
Chicago’s list-to-close dropped six days annually to reach 97 days in June. Inventory also moved down, by 13.3 percent, and the median home value in the Windy City was $198,200.
In Miami-Fort Lauderdale, selling time was 103 days, a five day increase from June 2015. Inventory boosted by 13.5 percent year-over-year, and the home value was at $235,500 in June.
In Houston, median days on the market increased by one day to reach 70 days. Inventory also jumped, by 4.4 percent. Houston’s median home value remained fairly affordable in June, landing at $172,900.
Entry-level homes fewer than most
The inventory problem didn’t affect everyone equally in Zillow’s report. The top third of U.S. homes showed the smallest drop in inventory compared to the other two-thirds of the market.
Low supply and high competition has also helped push the average home price to $187,000 in June — a 5.4 percent jump from last year. For eight continuous months, home values increased at 5 percent or higher compared to the year prior.
Fortunately for renters, rent growth (2.6 percent year-over-year) was the slowest in two years last month, Zillow says.
