Low Housing Inventories and Markets Most Affected
In many metropolitan areas, critically low inventories and subsequent skyrocketing home prices and rental rates are locking out new home buyers and impeding moves at a time when the economy is growing and employment is high. This is the first factoid in a series of five factoids that zeros in on markets hit the hardest with the housing shortage and those that are fairing better.
Once a problem faced mainly by big cities like San Francisco and New York, the demand for housing is far outweighing construction in both big and smaller-sized cities. Inventories are low almost everywhere impacting furniture and home furnishings purchases. During the period from 2011 when the housing market bust was in full swing to 2018, inventories among all metropolitan areas fell 56 percent. Among MSAs with housing unit populations over 500,000, inventories in 2018 dropped below 1.0 home for sale per 100 households. As the economy and housing market began to improve, the table shows the slight upswing in inventories in 2015, but a continual decline since.
Of the five states hit the hardest with the lowest housing inventories, California leads the way with only 0.44 homes for sale per 100 households, followed by District of Columbia with 0.47 and Massachusetts with 0.53. Washington State had the most dramatic decreases – inventory dropping 68 percent from 2011 to 2018 Q2 YTD.
Source: Zillow Inventory Data; Census Bureau Housing Units
Note: 2018 housing units have been estimated *Data is unavailable for Nevada and Indiana