SEATTLE, March 7, 2013 /PRNewswire/ -- The overall number of homes listed for sale nationwide on Zillow was down 16.6 percent year-over-year in late February, indicating a continuing inventory crunch as the market heads into the busy spring selling season.
Zillow looked at all homes available for sale on Zillow on Feb. 24, 2013 and compared it to the number of homes available on Feb. 24, 2012. The analysis covers homes nationally and in the 99 largest metro areas covered by Zillow, and across bottom, middle and top price tiers.
Nationwide, the greatest year-over-year decreases in inventory were among more expensive homes, with the availability of top-tier properties falling 20.5 percent year-over-year. That was followed by middle-tier homes (-17.2 percent year-over-year) and bottom-tier homes (-9.1 percent year-over-year). Only five metro areas showed more homes for sale overall last month than in February 2012: El Paso, Texas (+18.5 percent); Albuquerque, N.M. (+8.1 percent); Little Rock, Ark. (+7.7 percent); Fort Myers, Fla. (+1.5 percent); and Youngstown, Ohio (+0.2 percent).
"The supply of for-sale listings continues to dry up, driven in part by potential sellers trapped in negative equity and homeowners that won't sell out of fear they won't be able to find a suitable home to buy later," said Zillow Chief Economist Dr. Stan Humphries. "But the impact of constrained inventory will create the solution to the problem. Over the past year, inventory tightness has contributed to increases in home values in many markets. As home values rise, some homeowners will be freed from negative equity and able to list their homes, which will contribute to an easing of the inventory crunch. While this inventory is coming, it may still be a frustrating spring for buyers vying for what inventory is available. It's important to be patient and not commit to paying beyond one's comfort level in the heat of negotiations."
Large California metros experienced the biggest decrease in homes for sale over the past year. Among the 30 largest metros covered by Zillow, four of the top five in inventory contraction are located in California: Sacramento (-48 percent); Los Angeles (-45.7 percent); San Francisco (-40.9 percent); and San Diego (-39.4 percent). Minneapolis-St. Paul, Minn. (-36.7 percent) rounded out the top five.
While the overall number of homes listed for sale in February was down year-over-year, the drop was less severe than in January. In January, the number of for-sale listings was down 17.5 percent year-over-year, which could indicate an easing of the inventory crunch. Almost two-thirds (63) of the areas surveyed showed a smaller year-over-year decline in for-sale homes in February than in January.