Skip to content

West Coast Inventory Lowest in Nation, While Prices Languish Elsewhere

May 24, 2017

Image

The demand for housing around the U.S. has slightly outpaced the available supply of new and existing homes for the last few years. But certain markets have seen a much more dramatic crunch than others. This trend is particularly pronounced throughout much of the West Coast, where home prices are surging due to a shortage of inventory. 

Based on the most recent data available, Realtor.com found that many of the cities with fewer homes for sale last year were concentrated in several markets throughout Washington, Oregon and California. Seattle led the way with the biggest decrease in homes for sale in 2016 combined with the lowest percentage of housing stock for sale. Last year, according to the data, only 1 out of 263 existing homes in the Seattle area were for sale.

The trend hit an extreme in Eugene, Oregon, home to the state’s biggest university. Only 0.6 percent of Eugene’s homes were for sale in 2016, a year-over-year decrease of more than 27 percent. One real estate agent who spoke with Realtor.com said that homes in good condition around the Eugene area could be expected to sell in as little as 24 hours after listing. The agent did note that she expected 2017 to be slightly less hectic, however.

These supply shortages have not only made housing of any kind hard to find in certain markets, it’s becoming especially hard to simply afford it. Four different parts of the Seattle metro area ranked among the top 10 most competitive real estate markets in 2016, according to analysis by Redfin. In some of these neighborhoods, homes sold as much as 80 percent over their list price, while overall home values grew by at least 20 percent. The median sale price of homes in those four white-hot Seattle markets ranged from $324,000 to a high of $708,500.

Local leaders ramp up housing reforms

Local officials in many of these areas are responding by prioritizing new housing development, particularly by subsidizing affordable housing plans. In August 2016, the Seattle City Council approved a measure that would require local developers to contribute to a fund designed to support affordable residences, according to the Puget Sound Business Journal. The city estimated that this would enable the construction of up to 2,200 affordable housing units over the next 10 years. This effort was further bolstered by a $29 million bond levy earmarked for affordable home construction approved by Seattle voters in November 2016, as reported by local CBS affiliate KIRO 7.

Some cities still miss out on price gains

Despite the swift rise of home prices in the hottest real estate markets, a large subset of American homeowners in some areas have still not seen their property values return to pre-recession levels. Based on data from Trulia, CNBC reported that only 34 percent of U.S. homes have recovered to their values prior to 2007. In major metro areas such as Chicago, Las Vegas, and Washington DC, that number drops even further. In all, about two-thirds of all households that have little to show for what has been a nationwide boom. 

While the housing crunch continues to fluctuate in severity depending on the market, most real estate experts expect the trend to continue in 2017. As early as April, Redfin reported that 2017 was on track to be the most active year on record for home sales. The median sales price for all U.S. homes was up nearly 9 percent in March 2017 compared to the previous year, with around 20 percent of sales under contract in less than two weeks. No matter what, it appears this year will be another record-breaker for the U.S. real estate market.

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: