The Inventory of Homes for Sale is Shrinking, Even at the High End
January 8, 2020
The shortage of homes for sale accelerated at the end of the year. The supply of homes for sale in December was down 12 percent annually, a steep decline from November’s 9.5 percent annual decrease.
While the shortage has been most heavily felt at that lower-end of the market, even buyers of high-end homes are seeing their buying options shrink. The supply of entry-level homes priced below $200,000 fell 18.1 percent annually in December. The number of homes for sale priced over $1 million fell 4.4 percent annually, more than double the previous month’s 2 percent drop.
A confluence of events such as lower mortgage rates, older Americans choosing to age in place, millennials reaching the home-buying age, and the proliferation of single-family homes being converted to rental units, make it unlikely that inventories will improve any time soon. We are likely to see historic housing shortages in the coming year.