The modest calming of the housing market that began in late summer has continued into early fall, according to a recent market report from Zillow. Buyers are finding slightly more selection, price cuts and more time to evaluate a home before it goes under contract.
“The housing market continued its gradual return to some semblance of normalcy in September, helped by the typical seasonal cooldown in shopping conditions that we expect to see every fall,” Zillow Senior Economist Jeff Tucker said in a release. “Homes are still selling quickly, and prices have not receded, but it’s not quite as extreme a sellers’ market as we saw back in the spring and summer. Buyers today will benefit from a little more time to pick the right home and a few more listings to choose from.”
The Zillow Home Value Index rose to $308,220 in September, up 1.6 percent from August. Monthly home value appreciation slowed from August in 44 of the 50 largest U.S. metros. Monthly growth ranged from .4 percent appreciation in San Jose, Calif., to 3 percent in Raleigh, N.C.
Despite the modest cooling, September marked the fourth-fastest monthly pace of appreciation and a record pace of yearly appreciation in Zillow data dating back to 2000. The typical home was worth 18.4 percent more year-over-year, surpassing August’s then-record of 17.5 percent year-over-year appreciation.
Annual appreciation was in the double digits across all 50 major markets, ranging from 44.9 percent in Austin,Texas, to 13.2 percent in New Orleans.
The inventory shortage remains acute in much of the country, down 19.9 percent year-over-year and 37.7 percent below 2019 levels. However, there has been slow, incremental growth in inventory after it hit an all-time low in April.
For-sale inventory in September crept up by 0.4 percent from August, a smaller gain than the previous four monthly increases but roughly matching pre-pandemic seasonal patterns. It was the first month in which the year-over-year inventory deficit was smaller than 20 percent since July 2020.
Market velocity is also slowing. Homes took one day longer to sell in September than in August, with listings going into the pending stage in a median of nine days.
As homes are staying on the market longer, a higher percentage of them are seeing price cuts. The share of homes listed on Zillow that saw a price cut before going under contract rose to 14.7 percent in September, up from 7.9 percent in April. Looking forward, Zillow economists predict 13.6 percent home value growth through September 2022. This is a stronger 12-month forecast than August, supported by a slower inventory recovery and heightened sales and mortgage application activity. Existing home sales are expected to reach 6.04 million in 2021, up 7 percent from 2020.
Wednesday, October 27, 2021