Inventory is set to decline by 10% during 2018 compared to last year nationwide but that figure belies the crisis in super-tight markets such as California (41% fewer homes year-over-year) and Las Vegas (27% fewer).
"Tight inventory fueled by a tight labor market and low interest rates propelled home values to record heights in 2017, but the outlook is now much less certain," said Zillow senior economist Aaron Terrazas. "Tax reform will put more money in the pocket of the typical buyer, but will limit some housing-specific deductions. Overall, this should increase demand for the most affordable homes and ease competition somewhat in the priciest market segments.”
The US median home price hit a new record high in 2017 ($206,300) after rising 6.5% y-o-y. Again, the hottest markets outpaced the nationwide figure, with double-digit gains led by 14.3% in Las Vegas.
The lack of choice for homebuyers will drive some to seek more affordable options but that will mean compromise.
“The market is starving for new homes, but it won't be easy for builders struggling with high and rising land, labor and lumber costs. Aging millennials and young families may be able to find more affordable new homes for sale this year, but they'll most likely be in further-flung suburbs with more grueling commutes to urban job centers," Terrazas said.
More market update:
Homebuyers hoping to buy a home in the hottest US housing markets will continue to struggle to find homes to buy this year according to a new analysis from Zillow.