Massive Inventory Shrinkage Hits First-Time Home Buyers in California
Housing inventory is down — way down in some cases. Data released by Zillow today shows that lower-priced inventory, which is commonly sought by first-time home buyers, has seen steep annual declines.
Around the country, California is showing the largest decline in lower-priced inventory (-42.7 percent). Some of the most eye-popping numbers are out of the San Francisco, Sacramento, Fresno and Modesto metro areas, where first-time home buyer inventory fell by more than 50 percent from Sept. 30, 2011, to Sept. 30, 2012.
“First-time home buyers are being squeezed out of the market by falling inventory and the rapid influx of investors looking to buy basic homes to rent out to the growing population of people who have recently been foreclosed upon,” said Stan Humphries, Zillow chief economist. “Investors are paying in cash and can close sooner, which is more favorable to banks and homeowners looking to sell.”
National inventory rates decline, but less dramatically
Nationally, inventory rates have dropped by one-fifth (-19.4 percent) across all homes, with inventory declining the most in higher-priced homes (-22 percent).
In the largest 30 metro areas, inventory across all tiers has fallen the most in the Sacramento (-42.4 percent), San Francisco, (-42.2 percent) and San Diego (-40.7 percent) metros; and has fallen the least in the Cincinnati (-9.5 percent), Portland, OR (-10.8 percent) and St. Louis (-14.5 percent) areas.
Coming Friday, ‘California’s Housing Market: Navigating the Post-Bottom Landscape’
Later this week, Zillow and the University of Southern California Lusk Center for Real Estate are hosting a forum in San Francisco entitled, “California’s Housing Market: Navigating the Post-Bottom Landscape.” The forum will feature a distinguished group of speakers and panelists who will discuss and debate the housing market’s “new normal” and whether it is a good time to buy, and take stock of housing-related tax issues including California’s Proposition 13 and the mortgage interest deduction.
A live video webcast of the forum will also be made available Friday at 8 a.m. Pacific: http://www.zillowblog.com/category/housing-forum/