Inventory Constraints Ease in First Half of 2013 as Spring Season Brings Out More Sellers

Inventory Trends Turn a Corner in More Than Two-Thirds of Metros Analyzed, According to Zillow

News provided by

Jun 13, 2013, 08:00 ET

SEATTLE, June 13, 2013 /PRNewswire/ -- The number of for-sale listings nationwide on Zillow® was down in early June compared to the same time last year, but has improved since the beginning of the year as national inventory shortages eased during the spring selling season, according to online real estate marketplace Zillow.

The overall number of listings on Zillow was down 12.2 percent year-over-year earlier this month, a less severe crunch than the 17.5 percent shortfall recorded in January. In other words, inventory of for-sale homes on Zillow improved by 5.3 percentage points between January and June, controlling for seasonality.

Zillow looked at all homes available for sale on Zillow on June 2, 2013 and compared it to the number of homes available on June 2, 2012. Results were then compared to a similar study that analyzed inventory on Jan. 23, 2013 and Jan. 23, 2012. The analysis covers homes nationally and in the 99 largest metro areas covered by Zillow, and across bottom, middle and top price tiers[i].

Overall, year-over-year inventory levels improved in June compared to January in 70 metros and the nation as a whole. Among the 30 largest metro areas covered by Zillow, those with the highest degree of year-over-year inventory improvement between January and June include Phoenix (31.9 percentage point improvement); San Diego (14.9 percentage point improvement); and Minneapolis (13.5 percentage point improvement).

Inventory shortages worsened between January and June in 29 metro areas overall, and in 11 of the top 30 largest metros. Large metros where inventory constraints have tightened the most since the beginning of the year include Las Vegas (-21.8 percentage point worsening); Chicago (-12.3 percentage point worsening); and Washington, D.C. (-9.8 percentage point worsening).

"As the recovery has progressed, inventory constraints have played a major role in rapidly pushing up home values in many areas, as increasing demand for homes ran headlong into limited supply. It has always been just a matter of time before more supply came on the market to meet this demand, as homebuilders built more new homes and sellers entered the market to capitalize on recent robust appreciation in their own homes," said Zillow Chief Economist Dr. Stan Humphries. "Inventory will likely remain below year-ago levels for a while yet, as builders ramp up capacity and sellers wait to squeeze every drop of equity from their home before listing. But a corner has been turned. Going forward, as this new supply makes its way to market, we expect the pace of home value appreciation to slow down from unsustainably high annual levels of 5 percent or above to more moderate levels closer to historic norms of 3 percent or 4 percent. "

Nationwide, the greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier and middle-tier properties each falling 15.7 percent year-over-year. The number of bottom-tier properties for sale on Zillow nationwide fell only 2.5 percent in early June compared to June 2012.

	Change in Number of For-Sale Homes Listed on Zillow
Metro Area	Year-over-Year % Change, June 2	Year-over-Year % Change, Jan. 23	% Point Improvement/Worsening, Jan.-June
UNITED STATES	-12.2%	-17.5%	5.3
New York	-16.5%	-18.4%	1.9
Los Angeles	-42.0%	-43.2%	1.2
Chicago	-30.8%	-18.5%	-12.3
Dallas-Fort Worth	-19.0%	-20.2%	1.2
Philadelphia	-11.3%	-17.5%	6.2
Houston	-24.2%	-24.7%	0.5
Washington, D.C.	-34.2%	-24.4%	-9.8
Miami-Fort Lauderdale	-15.1%	-6.8%	-8.3
Atlanta	-36.5%	-34.9%	-1.7
Boston	-28.4%	-23.2%	-5.1
San Francisco	-30.3%	-43.7%	13.4
Detroit	-26.3%	-20.2%	-6.0
Riverside, Calif.	-34.6%	-37.5%	2.9
Phoenix	-3.2%	-35.1%	31.9
Seattle	-17.9%	-24.2%	6.3
Minneapolis-St. Paul	-24.1%	-37.6%	13.5
San Diego	-25.6%	-40.5%	14.9
Tampa, Fla.	-14.8%	-21.0%	6.1
St. Louis	-15.8%	-12.1%	-3.7
Baltimore	-18.6%	-19.8%	1.2
Denver	-19.6%	-32.4%	12.8
Pittsburgh	-11.4%	-5.8%	-5.6
Portland, Ore.	-19.5%	-21.8%	2.3
Sacramento, Calif.	-40.5%	-48.8%	8.3
Orlando, Fla.	-17.7%	-29.5%	11.8
Cincinnati	-9.0%	-6.8%	-2.3
San Antonio	-14.1%	-19.4%	5.4
Cleveland	-10.9%	-9.6%	-1.4
Kansas City	-22.4%	-34.5%	12.2
Las Vegas	-55.2%	-33.4%	-21.8

About Zillow:
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow's Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Buyfolio™, Mortech™ and HotPads™. The company is headquartered in Seattle.

Zillow.com, Zillow, Zestimate, Postlets and Diverse Solutions are registered trademarks of Zillow, Inc. Buyfolio, Mortech, HotPads and Digs are trademarks of Zillow, Inc.

[i] Zillow divides its inventory of for-sale listings into three tiers, based on the value of all homes within a given metropolitan area, as determined by Zillow's Zestimate of a home. Bottom-tier homes are the homes that fall into the bottom third of home values within the metro. Middle-tier homes are homes that fall into the middle third of home values within the metro. Top-tier homes are homes that fall into the top third of home values within the metro.

SOURCE Zillow, Inc.