Experts expected home prices to rise and inventory to continue to be a problem this spring selling season, but the inventory has been even tighter than expected, causing prices to appreciate beyond what was predicted. Zillow predicted a 2 percent growth in home values between April 2015 and April 2016. The latest data from the company, however, show values that have risen 4.9 percent.
Nationally, the inventory of homes for sale in April 2016 was 3.6 percent lower than April 2015, CNBC reports. But in some cities across the country, inventory as been particularly tight.
In Portland, Ore., for example, inventory is down 32 percent overall from one year ago and down almost 40 percent in the bottom tier of the housing inventory. Inventory in Dallas and Seattle has dropped 21 percent in both cities. The bottom tier inventory in Dallas dropped 32 percent while Seattle saw its bottom tier inventory decrease by 28.5 percent.
Meanwhile, Denver, which experienced the largest year-over-year price increase at 15.2 percent, had a 0.1 percent change in inventory for all homes and a 2.3 percent decrease for its bottom tier inventory.
Low inventory means anyone looking to purchase a house this spring, especially in these areas that are struggling most with low inventory, can expect to get into some pretty heated bidding wars, something that, it goes without saying, always ends up better for the seller than the buyer.
Homes in the lower-priced tier of the market have seen the most severe price drops, meaning entry-level buyers can expect to have the most difficulty throughout the remainder of this spring season and into the summer.
While the inventory in San Francisco’s bottom tier has decreased by 14.9 percent, the top tier of homes for sale has actually increased by 6.1 percent. Overall, San Francisco experienced a year-over-year increase in home value of 10 percent, which, for the Bay Area city, is actually slower than in the past. It now sits at $806,800.