SEATTLE — Home prices continued to climb into early October, with annual median list price growth reaching double digits, according to Zillow’s Weekly Market Report. Although the pace of newly pending sales seems to be subsiding in a delayed seasonal slowdown, a lack of inventory is keeping the market in sellers’ courts.
“The consequences of months of tightening inventory are being felt keenly by the nation’s housing market in the form of jaw-dropping price appreciation this fall,” said Zillow senior economist Jeff Tucker. “Our data on closed sales show sellers within a hair’s breadth of double digit year-over-year appreciation, an outcome almost unthinkable after prices stalled out in the depths of nationwide lockdowns this spring. Strong price growth seems poised to continue into the near future as buyers battle to outdo each other, bidding on a record-small pool of homes for sale.”
Late seasonal slowdown continues as buying activity cools
- The buying frenzy that took off in June and reigned over the summer continued to cool off in a delayed seasonal slowdown. Newly pending listings, while still up 17.6% compared to this time last year, are now in their fourth straight week of contraction. They fell 2.2% from the previous week and 7.3% month over month.
- Houses continued to be snatched off the market at a brisk, if now familiar, clip, with median time on market staying steady at 13 days. This is 15 days faster than at this time last year.
Inventory drops to record lows as sellers stay sidelined
- Demand for houses still far outpaces supply, as total inventory continued a long slide that began in late May. Total for-sale inventory fell 1.2% week over week, and is now 35.7% lower than last year, the largest yearly decline since Zillow’s weekly data series began in 2019.
- Among the country’s 50 largest metro areas, inventory has dropped the most since last year in Riverside (48%), Salt Lake City (47.3%) and Memphis (47%).
- Sellers seem content to watch the action from the sidelines as new for-sale inventory tightened over the week. As of Oct. 3, new inventory is down 18.1% year over year and 0.6% week over week.
Home prices maintain momentum to push high above last year’s levels
- Median list price rose slightly week over week to $345,225 and now stands 10.9% higher than last year—the largest year-over-year gain since at least 2019. List prices have grown rapidly since early May, when the median was $317,228—down 0.2% year over year.
- Median sale home prices for the week ending August 22 ticked up 0.4% week over week to $285,843, 9.9% above last year’s prices and the largest year-over-year rise in prices in Zillow weekly data going back through 2019. At the same time last year, sale prices were up 4.2% over 2018.
Stimulus talks stumble, adding to long-term economic uncertainty
- Negotiations surrounding another comprehensive federal stimulus package fell apart earlier this week. Zillow economist Matthew Speakman predicts this will likely prompt the Federal Reserve to take additional action to stimulate the economy, which in turn should help keep mortgage rates low for the foreseeable future. Meanwhile, industry groups are pressing for a quick stimulus package solution.
- More than half of the economists in a monthly survey by the Wall Street Journal said they didn’t expect job numbers to return to pre-pandemic levels until 2023 or later, citing a slower labor market recovery, potential for the crisis worsening, and the lack of a new stimulus plan.