Influx of sellers arrives just in time for spring season

Rhea-AI Summary

Zillow reports a 21% annual increase in new listings, with total inventory up by 12% nationally. Despite more choices for buyers, stiff competition remains for attractive listings. The typical home value in the U.S. is $349,216, up 40.8% from before the pandemic.

Positive

• New listings on Zillow rose 21% annually, with the South experiencing the highest gains.
• Total inventory increased by 12% compared to last year, with Dallas, Tampa, Orlando, and Miami showing the highest annual increases.
• Competition for well-priced listings is strong, with homes going pending in 17 days on average.
• Price cuts are more common, with 1 in 5 listings seeing reductions to attract buyers.
• The typical home value in the U.S. is $349,216, up 40.8% from pre-pandemic levels.

Negative

• None.

Economist

The recent surge in new listings, up by 21% annually, is a significant indicator of movement in the housing market. This rise suggests a possible easing of the 'rate lock' effect, where homeowners are disinclined to sell due to higher prevailing mortgage rates compared to their current ones. The increase in inventory, especially in the South, may be attributed to the new construction giving existing homeowners more options to relocate, thereby freeing up more existing homes for sale.

From an economic perspective, the increase in supply could temper the rapid price appreciation seen in recent years. However, strong competition for desirable properties, as indicated by homes going under contract in just 17 days, suggests that demand remains robust. The presence of price cuts in one-fifth of the listings could indicate a market adjustment where sellers are realigning their expectations with current market conditions. This scenario is a departure from the seller's market observed over the past few years and could lead to a more balanced market dynamic.

Market Research Analyst

Analyzing the market trends, the significant inventory increases in cities like Dallas, Tampa, Orlando and Miami highlight regional disparities in market recovery and growth. The South's strong performance could attract more buyers and investors to these areas, potentially impacting regional economies. However, the fact that homes are still selling relatively quickly indicates sustained buyer interest, which could support home prices despite the increased inventory.

It's important to note the variation in market response to aspirationally priced listings versus well-priced properties. This distinction emphasizes the importance of accurate pricing and market positioning for sellers. Additionally, the data showing that typical home values have risen 41% nationwide since before the pandemic underlines the substantial equity gains homeowners have experienced, which could influence their selling decisions and financial flexibility.

Financial Analyst

The housing market dynamics, as reflected in the increased listings and inventory, could have implications for various stakeholders. For homebuilders and real estate companies, the data suggests a healthier inventory level that could stabilize sales volumes. However, the rising mortgage rates, which have increased the cost of a mortgage on a typical home by 9.4% compared to last year, may affect affordability and potentially slow down the pace of home buying.

Investors in real estate investment trusts (REITs) or housing-related stocks should monitor these trends closely, as they could influence company performance and stock valuations. The impact on the stock market could be mixed, with potential benefits for companies involved in home construction and renovation, while mortgage lenders might face headwinds from the higher rates.

New listings are up 21% annually, evidence of rate lock easing

• New listings rose annually in every major metro.
• Total inventory rose 12% year over year; the largest gains came in the South.
• Competition is stiff for attractive listings; homes went pending in just 17 days nationwide.

SEATTLE, March 14, 2024 /PRNewswire/ -- An infusion of new inventory into the market is welcome news for buyers on the hunt for their next home this spring. It's also more evidence that the effects of "rate lock" on homeowners are starting to weaken, according to the latest monthly report¹ from Zillow®.

"For more than a year, Zillow homeowner surveys have shown an elevated share of homeowners expecting to sell in the next three years. We're finally beginning to see owners who have been putting off moves return to the market," said Skylar Olsen, chief economist at Zillow. "For many households with record-high equity, waiting out potentially lower rates later in the year may not be worth it."

More choices for buyers
Buyers are seeing more choices on the market, which should help spur sales this spring.

New listings of existing homes on Zillow are up 21% in February compared to last year, and rose 20% from January. The rising tide of new listings was universal; counts are up annually in each of the 50 largest U.S. metros. They're coming on strongest in the South, especially Texas and Florida. Substantial new construction in these areas is likely helping to give existing homeowners somewhere to move to, freeing up existing inventory.

Total inventory is increasing significantly as well, up 12% nationally compared to last year. At just over 900,000, there were more homes for sale in February than in any February since 2020. Annual increases are highest in Dallas (up 39%), Tampa (31%), Orlando (30%) and Miami (29%).

Stiff competition for attractive listings
Despite February's supply increase, competition remains strong for attractive, well-priced listings. Homes that went under contract in February typically did so after 17 days — that's slower than during the rate-fueled frenzy of 2021 and 2022, but far faster than before the pandemic.

Aspirationally priced listings, or those lacking real or virtual curb appeal, are lingering on the market. The average time on Zillow for all homes was 53 days, which is longer than normal for this time of year.

Price cuts are more common than normal — 1 in 5 listings on Zillow are seeing cuts — as sellers bring their expectations closer to where buyers can meet them. Most sellers will have plenty of cushion to absorb a price cut and come out ahead from when they bought their home. Typical home values are up from last year in all but three major metros, and values have risen 41% nationwide since before the pandemic.

Housing costs continue to climb
The typical home in the U.S. is worth $349,216, according to the Zillow Home Value Index — up 40.8% compared to before the pandemic. Monthly gains were largest in expensive coastal metros: San Jose (1.6%), San Diego (1.3%), Seattle (1.2%), San Francisco (0.8%) and Washington, D.C. (0.8%).

Mortgage rates rose in February, helping bump the cost of a mortgage on a typical home 9.4% higher than last year. That has changed the math for home buyers, who now need to earn about 80% more than in 2020, and are more often partnering with friends and family or "house hacking" their way to homeownership.

Metropolitan Area*	February Zillow Home Value Index (ZHVI) (Raw)	ZHVI Change, Year over Year (YoY)	Median Days to Pending	Change in Days to Pending vs. Pre- Pandemic Average	Share of Listings with a Price Cut	Inventory Change, YoY	New Inventory Change, YoY
United States	$349,216	4.2 %	17	-10	20.1 %	12.0 %	20.8 %
New York, NY	$640,486	7.0 %	26	-31	10.3 %	-14.8 %	3.7 %
Los Angeles, CA	$926,861	8.3 %	14	-6	14.0 %	-3.1 %	18.0 %
Chicago, IL	$307,944	7.3 %	9	-16	16.7 %	-4.5 %	18.1 %
Dallas, TX	$372,660	1.3 %	19	-9	25.9 %	38.8 %	50.7 %
Houston, TX	$303,824	1.2 %	28	2	24.5 %	14.8 %	23.1 %
Washington, DC	$551,667	4.3 %	6	-17	15.4 %	-6.3 %	10.9 %
Philadelphia, PA	$349,795	7.7 %	9	-27	17.6 %	-4.7 %	7.6 %
Miami, FL	$479,826	7.5 %	35	-9	23.8 %	28.6 %	31.8 %
Atlanta, GA	$377,476	4.4 %	22	6	22.6 %	15.5 %	32.1 %
Boston, MA	$668,255	8.8 %	8	-5	10.7 %	-1.1 %	13.5 %
Phoenix, AZ	$453,327	4.0 %	20	-7	32.1 %	-10.8 %	19.0 %
San Francisco, CA	$1,130,166	2.5 %	12	-2	11.7 %	1.9 %	19.2 %
Riverside, CA	$568,817	6.1 %	18	-7	18.7 %	-1.0 %	19.6 %
Detroit, MI	$242,648	6.5 %	11	-11	17.9 %	-3.4 %	16.2 %
Seattle, WA	$721,382	4.4 %	6	-4	13.9 %	-1.0 %	32.2 %
Minneapolis, MN	$363,973	2.0 %	19	-2	15.5 %	22.5 %	40.4 %
San Diego, CA	$930,314	10.8 %	10	-11	16.8 %	8.4 %	22.5 %
Tampa, FL	$377,087	3.6 %	26	2	32.8 %	30.7 %	32.6 %
Denver, CO	$579,917	1.7 %	9	2	21.6 %	9.4 %	19.6 %
Baltimore, MD	$375,866	4.2 %	7	-29	18.8 %	2.1 %	16.3 %
St. Louis, MO	$243,550	6.2 %	7	-16	16.9 %	9.3 %	12.7 %
Orlando, FL	$393,190	4.1 %	24	4	25.2 %	29.5 %	31.3 %
Charlotte, NC	$375,008	4.6 %	13	0	19.7 %	0.1 %	21.6 %
San Antonio, TX	$283,608	-2.5 %	44	4	27.0 %	24.7 %	20.3 %
Portland, OR	$538,452	2.3 %	15	1	19.0 %	14.7 %	22.0 %
Sacramento, CA	$569,580	3.4 %	9	-4	17.3 %	-12.4 %	16.3 %
Pittsburgh, PA	$203,573	5.8 %	12	-40	20.5 %	-0.3 %	11.6 %
Cincinnati, OH	$273,507	6.2 %	5	-13	19.1 %	13.7 %	18.6 %
Austin, TX	$456,293	-5.1 %	40	26	21.3 %	6.5 %	37.1 %
Las Vegas, NV	$415,400	4.6 %	17	-9	18.5 %	-22.5 %	19.0 %
Kansas City, MO	$295,389	5.4 %	6	-13	19.3 %	15.2 %	26.3 %
Columbus, OH	$304,628	6.3 %	5	-3	20.7 %	13.0 %	15.9 %
Indianapolis, IN	$271,674	3.1 %	12	-12	21.8 %	13.4 %	14.0 %
Cleveland, OH	$217,511	7.4 %	9	-40	16.0 %	-5.1 %	3.1 %
San Jose, CA	$1,537,093	8.8 %	9	-4	8.3 %	0.3 %	24.2 %
Nashville, TN	$434,361	1.8 %	21	0	26.5 %	-1.4 %	12.3 %
Virginia Beach, VA	$340,789	6.0 %	24	-46	16.6 %	9.3 %	14.4 %
Providence, RI	$456,902	8.4 %	9	-25	13.2 %	-4.1 %	4.0 %
Jacksonville, FL	$354,250	1.2 %	34	-1	26.8 %	17.9 %	29.8 %
Milwaukee, WI	$330,730	7.5 %	22		12.2 %	11.7 %	12.6 %
Oklahoma City, OK	$229,838	3.6 %	19	-50	23.6 %	28.4 %	28.0 %
Raleigh, NC	$437,580	3.0 %	11	3	23.8 %	4.4 %	18.0 %
Memphis, TN	$235,883	1.4 %	31	-10	22.0 %	28.5 %	24.6 %
Richmond, VA	$357,211	5.4 %	7	-7	17.8 %	9.1 %	16.4 %
Louisville, KY	$248,361	4.4 %	9	-14	22.9 %	11.9 %	13.9 %
New Orleans, LA	$235,804	-7.5 %	42	4	22.2 %	23.2 %	20.5 %
Salt Lake City, UT	$533,750	1.6 %	15	3	20.7 %	0.0 %	25.5 %
Hartford, CT	$343,635	12.5 %	6	-27	11.2 %	2.1 %	5.5 %
Buffalo, NY	$246,490	7.5 %	11	-17	11.9 %	-9.1 %	1.6 %
Birmingham, AL	$247,914	1.3 %	14	-5	19.7 %	10.5 %	14.9 %

*Table ordered by market size 

About Zillow Group: 
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

¹ The Zillow® Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research.

 

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SOURCE Zillow

What was the annual increase in new listings reported by Zillow?

Zillow reported a 21% annual increase in new listings.

Which region experienced the highest gains in new listings according to Zillow?

The South experienced the highest gains in new listings, especially in Texas and Florida.

How much did total inventory increase nationally compared to last year?

Total inventory increased by 12% nationally compared to last year.

What is the average time for homes to go under contract on Zillow?

Homes typically go under contract in 17 days on Zillow.

What is the typical home value in the U.S. according to the Zillow Home Value Index?

The typical home value in the U.S. is $349,216, up 40.8% compared to before the pandemic.