Zillow: Homes in Short Supply as Home Shopping Season Kicks Off

Zillow, Seattle, said with the spring home shopping season underway homebuyers can expect 3 percent fewer homes on the market than a year ago and homes for sale at their highest point in 10 years.

The company’s monthly Real Estate Market Reports said U.S. home values rose by 6.9 percent over the past year to $195,700 in February. Rents rose by 1.2 percent over the past year to $1,406 per month.

Zillow Chief Economist Svenja Gudell said inventory shortages will be a big concern for buyers going into home shopping season.

“Low inventory, strong demand and tough competition will be the defining characteristics of this year’s home shopping season,” Gudell said. “Even though interest rates are rising, buyers are eager to start their home search.”

Tampa, Seattle, Dallas and Orlando reported the highest year-over-year home value appreciation among the 35 largest metros across the country, all growing in the double-digits. In Tampa, home values rose by nearly 12 percent to a median home value of $182,100. Home values in both Seattle and Dallas rose by 11 percent from a year ago. Zillow said high buyer demand coupled with fewer homes for sale is driving home values higher in many of these markets, with 5 percent fewer homes to choose from than a year ago in Tampa and 11 percent fewer in Orlando.

Minneapolis, Cincinnati and Detroit reported the greatest drop in inventory since last February. Minneapolis reported 18 percent fewer homes on the market than a year ago; Cincinnati reported 15 percent fewer homes.

Seattle, Portland and Sacramento, Calif. reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle rose by 7 percent to $2,100. Rents in both Portland and Sacramento rose by 5 percent.