On February 14th, 2019, Zillow released data on the U.S. housing inventory trends for January of 2019. Their report shows that market conditions may begin to favor buyers over sellers this year.
Housing Inventory Changes in January 2019
According to Zillow’s data, for-sale homes in the United States increased by 1.2% year-over-year. Nationwide, there were 19,455 more homes for sale in January 2019 than in January 2018. This is based on national averages and may not reflect the housing inventory trend in specific areas of the country.
Markets that are typically the most competitive have seen some of the largest changes. These markets remained competitive but were not as hot as in past years. California metros like Los Angeles saw a 29.1% increase in inventory year-over-year, while San Diego housing inventory increased by 31.9% and San Jose increased by 42.9%.
While home inventories increased in many metros around the US, they did not increase in all metros. Areas like Baltimore, Kansas City, and Pittsburgh saw close to a 10% reduction in inventory year-over-year, while Washington D.C. saw a 19.9% decrease in inventory. Some metros stayed closer to the national average, including Las Vegas and Chicago at 2.2% and Minneapolis-St Paul at 0.2% increases.
Previous Housing Inventory Trends
Inventory of for-sale homes has not increased in the month of January since at least 2014. Every year between 2014 and 2019, for-sale home inventories decreased in January year-over-year. The trend for the last 4 years has indicated stronger competition for buyers in most of the U.S.
Home inventories have been consistently tightening over the country for months, even into the beginning of 2018. Though homes were being added to the market, that rate was not fast enough to keep up with growing demand. And although the inventory trend may be starting to reverse, competition for homes is still high in many metros.
Is It a Buyer’s Market?
Despite the early signs of a change in the housing market, there’s not enough evidence to say that it’s a buyer’s market. The overall housing market may improve for buyers slowly, with some metros already showing favorable signs for buyers, but the national trend does not indicate that the market has significantly improved for buyers right now.
On the contrary, Zillow senior economist Aaron Terrazas believes that it could become even more competitive during early 2019. According to him, this increase in inventory doesn’t show a decrease in demand. When observed with other data showing a continued increase in home values throughout the U.S. and lower mortgage rates, market conditions may not immediately change in favor of buyers.
Demand is still matching or outweighing the supply of houses in much of the United States. If the trend of increased inventory continues throughout 2019, it may become more of a buyer’s market. However, markets are currently still more favorable for sellers in most metros.
Related: For First Time in Five Years, Buyers Have More Selection to Start the Year (January 2019 Market Report)
Market Conditions in Florida and Pennsylvania
The national snapshot doesn’t reveal much about individual markets. Let’s take a closer look at some of the East Coast metros that are on the extreme ends of the national average.
Philadelphia and Pittsburgh, as previously mentioned, had a decrease in housing inventory in January of 2019. The decrease in Philadelphia was 6.3% year-over-year.
In Florida, the largest metros were completely the opposite of Pennsylvania. Miami-Fort Lauderdale had an inventory increase of 8.1% year-over-year, with Tampa just behind with an 8% increase. Orlando also showed an increase, though it was smaller at only 3.5%.
All the metros mentioned in Florida and Pennsylvania had median home values close to, or below, the national median home value, except for Miami-Fort Lauderdale. Many of the other U.S. metros with larger changes in home inventory also had larger changes in median home value.
Home Value Trends in the U.S.
Zillow’s research also revealed a continuing trend of home value growth in the U.S. Despite growing housing inventory, houses around the country are still experiencing value growth similar to last year’s numbers.
Home value trends don’t necessarily reflect the valuation trends in every local housing market. Some communities are seeing lower value growth while others, such as Atlanta, are experiencing enormous value growth of around 12%. Rent values also grew nationally, though at a slower rate of 2.1%.
Taking Advantage of a Homebuyers Market
If you are thinking about taking advantage of the homebuyer’s market, which is already starting to materialize in some housing markets, there are a few things you should do.
Most importantly, get with your mortgage broker as soon as possible to be pre-approved for a home loan. This process will show you where you could possibly make a few adjustments with your finances to get a better mortgage, while also showing you the amount you can borrow to buy a home.
With a pre-approval for a mortgage, you are also in a better position to shop for a home, because you’ll be viewed as a serious buyer by sellers and Realtors alike. Furthermore, when it comes time to negotiate to buy a home, you’ll be in a better position to close quickly with a high degree of certainty that you’ll close on the loan, giving you a stronger position to negotiate the purchase price.
Related: Select a Mortgage Broker Who Gives You a Competitive Advantage
Furthermore, by working on your mortgage sooner rather than later, you can more easily discover mortgage programs that will save you money over the long term, and get you into a home with the least amount of money down.
Related: Low Down Payment Mortgage Options
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA, and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application, or contact us direct.