As the consumer shopping season wound down in December, real estate demand remained high amidst staggeringly low inventory. Zillow’s latest market report showed housing inventory is down 40.5% versus December 2019—just a few months before the COVID-19 pandemic began.
The low-inventory pressure is having a clear and direct impact on home prices, which are continuing to accelerate. The report revealed an annual, record-breaking home value increase of 19.6% in 2021 versus the previous year. Further, rents increased 15.7% during the same period to an $1,855/month average.
- The Zillow Home Value Index (ZHVI) rose 1.4% in December from November, to $320,662.
- Monthly home value growth accelerated from November to December in 35 of the nation’s 50 largest metro markets.
- Among the nation’s 50 largest markets, the slowest monthly growth in December were in Milwaukee (0.2%), Buffalo (0.4%), New York (0.6%), Hartford (0.6%) and Sacramento (0.6%).
- The fastest growth was in Nashville (2.8%), Atlanta (2.4%) and Austin (2.2%).
- Inventory bottomed out by 11.1% to a new record low of about 923,000 homes nationwide.
- Inventory was down in December from November in at least 49 of the nation’s 50 largest metros (monthly data for Nashville is unavailable), and was down year-over-year in 47 of the 48 largest metros, where data is available.
- The largest annual inventory declines among the largest 50 markets were in Miami (-48.0%), Denver (-40.3%) and Raleigh (-39.2%).
- Bucking the Inventory trend, however, was Austin, which was up 14.6% YoY.
According to forecasting, home sales will continue their growth in 2022 to the highest levels in 17 years. Likewise, home values will continue to increase by an estimated 14.3% annual rate, per the Zillow report. With an expected 6.6 million existing home sales in 2022 (up 7% versus 2021), real estate professionals should expect another banner year.