There’s no question about it: the markets, particularly in the single-family home segment, have been hectic. Properties are flying off the market and multiple-offer scenarios are boosting home prices to exorbitant values. But according to a new Zillow report, homebuyers may find some relief soon.
Zillow®’s Monthly Home Market Report found that while demand for homes pushed total for-sale inventory down 1.1% in March, month-over-month data shows a different picture, and that’s due, in part, to a new inventory rush.
“March often sees a boost in inventory, and the return to some seasonal norms is a positive sign that supply is beginning to catch up with demand,” said Zillow economist Treh Manhertz in a statement. “With home values skyrocketing, vaccination rates rising and employees getting long-term guidance on where they can work, we expect an increasing number of homeowners to join the market and list in the coming months. That will come as welcome news to home shoppers who are seeing bidding wars and homes plucked from the market weeks faster than usual.”
Zillow’s economists predict that 6.4 million homes will sell in 2021—that’s up 13.5% from 2020 and the strongest performance since 2006 for home sales. Over the next 12 months, Zillow predicts that home values will rise 10.4%.
And while there’s still talk of a bubble bursting, Zillow reminds us that, foundationally, the markets remain strong: average credit scores for buyers are much higher than in the early 2000s, lending standards are not as loose, and demand, particularly from aging millennials, is expected to grow.
As for a market snapshot, these areas are experiencing the highest MoM home value growth right now, according to Zillow: Austin (2.4%), Phoenix (2.3%) and Riverside (1.9%). Meanwhile, these areas have shown sluggish growth: San Jose (0.05%), San Francisco (0.6%) and Orlando (0.7%).
Liz Dominguez is RISMedia’s senior online editor. Email her your real estate news ideas to lizd@rismedia.com.
