December saw the largest year-over-year decline of housing inventory in almost three years with a 12% percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018, according to realtor.com’s December 2019 Housing Trends report.
The decline is accelerating across all price levels, including the luxury market. In December, inventory of homes priced under $200,000 declined by 18.1% year-over-year, higher than the 16.5% drop in November. Mid-tier housing priced between $200,000 and $750,000 also declined at an accelerated pace, up 10.2% year-over-year compared to November’s decline of 7.4% percent. Listings of homes priced over $1 million shrunk by 4.4% year-over-year, up from nearly 2% in November.
“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30 years of age in 2020, a prime age for many to purchase their first home,” said realtor.com Senior Economist George Ratiu. “The significant inventory drop we saw in December is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”
The shortage shows no signs of slowing anytime soon. December’s decline is an acceleration from November’s drop of 9.5%, and equates to a loss of nearly 155,000 listings compared to December 2018. Additionally, new listings are failing to restore the market to equilibrium as the volume of newly listed properties also declined by 11.2% year-over-year.
On a local level, the tech havens of San Jose-Sunnyvale-Santa Clara, California; Seattle-Tacoma-Bellevue, Washington; and San Francisco-Oakland-Hayward, California all saw inventory declines of more than 30% in December as well as listing price growth above the national median. Only three of the 50 largest U.S. metros saw inventory increase over the year: San Antonio-New Braunfels, Texas (+8.8%); Minneapolis-St. Paul-Bloomington, Minn.-Wis. (+7.4%) and Las Vegas-Henderson-Paradise, Nev. (+4.8%), which all had year-over-year declines in their median listing prices.
Overall, the median U.S. listing price grew by 3% percent, to $299,950 in December, down from the previous last month, when the median listing price grew by 3.6% percent over the year. At the same time, price growth is continuing to heat up in metros where inventory declines were greatest in December.
