Demand from home buyers remains robust

[mnhtnbb]

The number of homes for sale in February was down by almost half from the immediate pre-pandemic period two years ago, helping push housing costs up across the board throughout the transformative, two-year pandemic era. Rents are up by hundreds of dollars per month and home values up by almost a third over the same span, according to the February 2022 Zillow Monthly Market Report.

But still, despite the rapidly rising costs, demand from home buyers remains robust, with listings flying off the market and sales stronger than pre-pandemic levels.

The key metric driving these historic hikes is inventory. There were roughly 730,000 homes for sale nationwide in February, compared to 1.4 million in February 2020. Historically, inventory has generally bottomed out in December and then rebounded as sellers listed their homes in preparation for the busy spring shopping season. But this year, supply has continued to dwindle well into the new year and inventory was 11.9% lower in February than in January.

Of the 50 largest U.S. metros, those with the largest inventory deficit since 2020 are Raleigh (-69.7%), Hartford (-63%), Providence (-61.8%) and Miami (-61%). Those seeing the smallest decrease are San Francisco (-7.8%), San Jose (-17.9%) and Austin (-26.9%).

https://www.zillow.com/research/february-2022-market-report-30843/


It's crazy out there and classic demand/supply dynamics. I live in Durham--adjacent to Raleigh with the largest inventory deficit since 2020--and I watch the real estate market on a regular basis. I've watched Zillow predict the value of the house I bought--to be constructed--in April 2020 rise 39% since then! Yikes. The builder of my development is getting ready to open a new phase later this summer with another 68 homes and I suspect they will be throwing darts at where to start the pricing. They are currently selling homes in nearby Cary, with starting prices for the same floor plans at more than $100K higher than where pricing started when I bought just two years ago. And most people aren't buying the bare bones houses; most of my neighbors have spent $50-100K more on upgrades!

Here's a link to another article which suggests it's going to be another two years before inventory rises to pre-pandemic levels.
https://www.zillow.com/research/zhpe-q1-2022-inventory-returns-30878/

Of course, Putin may have blown us all up by then.

[KPN]

1. FOMO on steroids ... pumped up by the RE

industry, including Zillow and other corporate flippers who all benefited massively along with banks and mortgage corporations from the 2009 bailout. At it, screwing the US economy again.