The pandemic housing market across the U.S. is putting interested buyers in a serious bind: Demand for new homes is on the rise but homeowners are largely staying put, meaning inventory is limited, competition is heated and prices are spiking. Among the nation’s 50 largest metro areas, 38 percent fewer homes were on the market in the third quarter of 2020 than during the same period last year, according to a study from Nerdwallet, the personal-finance company.
“Its wild to see how the seasonal fluctuations have been disrupted,” said Elizabeth Renter, a Nerdwallet data analyst and the author of the study. “It’s so out of whack.”
In 45 of the 50 metro areas, the number of listings fell by at least 25 percent year over year. The smallest decrease was 11 percent in Las Vegas. But some markets had much greater declines than others; in five, inventory dropped more than 50 percent.
Salt Lake City led the pack with 57 percent fewer homes for sale — from 3,393 available listings in Q3 2019 to 1,475 in Q3 2020. While that still may seem like plenty of choices, only a tiny fraction will meet a hopeful buyer’s criteria for price, size, location and home features.
“There’s a herd of interested buyers,” Ms. Renter noted. “Competition on affordable and really desirable properties is really fierce.” That’s been pushing up prices in areas with wide-ranging price points and types of homes. In fact, prices rose in all but two of these metro areas, regardless of each market’s overall affordability.
For example: In Pittsburgh, the third-least-expensive metro area (average list price: $250,445), prices were up 23 percent over a year, while in Los Angeles, the third-most-expensive metro (average list price: $998,056), prices were up by a similar 19 percent.
But if prices are so high, why aren’t more owners listing their homes and cashing in?
“They may be thinking, ‘It’s a great time to sell,’” mused Ms. Renter, “‘but then I’ll be in the same boat as everybody else — I’m going to be looking to buy.’”
This week’s chart shows the 25 U.S. metro areas with the greatest percentage decreases in inventory, their average list prices, and how much they’ve changed.