US housing market reports are in for December of 2019 and they show a continuing trend of dropping housing supply and rising prices across the nation.
December 2019 US Housing Supply Trends
Typically, the winter real estate market slows down and buyers find fewer homes for sale. While there are some advantages to buying an investment property during this season, December 2019 seems to have offered even fewer options for buyers than usual.
Realtor’s December 2019 Monthly Housing Market Trends Report revealed that US real estate supply fell by 12% year-over-year (YOY). This the lowest the housing stock has been since January of 2018. Compared to the previous month, the housing supply seems to be dropping at a continually faster rate. Reports show that supply fell by 9.5% YOY in November. Hitting a two-year low, this YOY decline is the largest the US real estate market has seen in three years. In terms of newly listed homes for sale, there was also a YOY drop of 11.2%, which further exacerbated the issue.
These trends are somewhat expected due to the lower mortgage rates. Even with fewer options for houses for sale, both homebuyers and real estate investors are entering the housing market to take advantage of the favorable conditions as price growth acceleration slowed down during 2019.
A Drop in Housing Inventory Across All Real Estate Sectors
This drop in housing supply was seen across all real estate sectors- from affordable properties to those in the mid-price range to luxury properties. This was a notable real estate market trend in November of 2019 as well, with the stock of properties for sale priced over $1 million falling 1.7% YOY- the first decline in almost 2 years. The supply of properties for sale in the mid-price range ($200,000-$750,000) fell by 7.4% and inventory priced below $200,000 fell at an increasing rate of 16.5%.
For December, here is how each sector fared:
- High-priced housing supply dropped by 4.4% YOY
- Mid-priced housing supply dropped by 10.2% YOY
- Low-priced housing supply dropped by 18.1% YOY
Housing Inventory Trends by Market
Looking at the 50 largest metro areas in the US housing market, real estate supply dropped YOY by 12% in December.
The metro areas which had the largest drops were:
- San Jose-Sunnyvale-Santa Clara, CA (-33.1%)
- Seattle-Tacoma-Bellevue, WA (-31.8%)
- San Francisco-Oakland-Hayward, CA (-30.4%)
The 3 metro areas that actually saw an increase in housing supply last month were:
- San Antonio-New Braunfels, TX (+8.8%)
- Minneapolis-St. Paul-Bloomington, MN-WI (+7.4%)
- Las Vegas-Henderson-Paradise, NV (+4.8%)
If you’re a real estate investor looking to take advantage of the promising rental market in 2020 as well as the low investment property mortgage rates, you will find more options for investment properties for sale in these housing markets. Start your search now with Mashvisor.
Houses for Sale Sold Quicker and at Higher Prices
Expected real estate market trends that go hand in hand with decreasing housing inventory include lower days on market (DOM) and an increase in the US median property price.
The average DOM for December was 79, which was two days lower than it was a year prior. Looking at the 50 largest US metros, the average DOM was the same as December 2018.
The real estate markets that saw the largest drop year-over-year in DOM were:
- Raleigh, NC (-13 days)
- Oklahoma City, OK (-11 days)
- Rochester, NY (-8 days)
The real estate markets that saw year-over-year increases in DOM were:
- Los Angeles-Long Beach-Anaheim, CA (+22 days)
- Buffalo-Cheektowaga-Niagara Falls, NY (+10 days)
- Boston-Cambridge-Newton, MA-NH (+9 days)
Even with the shortage of housing supply and the decrease in DOM, price gains continue to slow down. December saw an increase in the US median property price of 3% to $299,950. This was less than the 3.6% YOY growth in November. Of the 50 largest metro areas, 42 saw an increase YOY.
The real estate markets that saw the largest year-over-year increase in listing prices were:
- Los Angeles-Long Beach-Anaheim, CA (+21.0%)
- Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (+13.1%)
- Birmingham-Hoover, AL (+11.1%)
The real estate markets that saw the largest year-over-year drops were:
- Louisville/Jefferson County, KY-IN (-5.0%)
- Minneapolis-St. Paul-Bloomington, MN-WI (-4.1%)
- Houston-The Woodlands-Sugarland, TX (-2.9%)
You Can Still Find a Good Real Estate Deal in the US Housing Market
Although supply is low and competition is increasing, price reductions are still apparent in the market. 13.2% of active real estate listings saw their prices reduced, down only 0.5% YOY in December.
15 out of the 50 largest metros saw an increase in price reductions, with Portland-Vancouver-Hillsboro, OR-WA leading the way with a 14.7 % increase. Following are:
- Indianapolis-Carmel-Anderson, IN (+3.1%)
- Houston-The Woodlands-Sugarland, TX (+2.6%)
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To see the full list of metro areas along with the real estate data on housing supply, real estate prices, and DOM, read Realtor’s full report here.