Housing inventory declined more than 9 percent over the month of January in the 19 markets in which online real estate brokerage Redfin has a presence, according to the company’s Real-Time Price Tracker for January. The decline marks the fourth consecutive monthly drop in inventory, according to Redfin.
"A year ago, we didn't think inventory could go any lower, yet we're beginning 2014 with another disappointment," Redfin stated in its January report.
With the caveat that "it is too soon to tell," the brokerage did offer some optimism regarding inventory in coming months, revealing "Redfin agents report that most of their home selling clients are planning to list between March and May."
Sellers say they believe they will receive better offers during spring home buying season, and they believe when they do list their homes, they will sell easily and quickly.
The report also indicates the market is in somewhat of a catch-22: Sellers are reluctant to list their homes for sale while inventory is so low, as they are unsure they will be able to find and afford a new home, according to Redfin.
Home sales declined closely in line with inventory, falling almost 10 percent in January. However, Redfin explains this is no surprise, as January's home sales result from offers made during the holiday season, often "the lowest point of the year."
Home prices in Redfin's 19 markets increased 14.3 percent year-over-year in January, similar to last January’s 14 percent year-over-year increase. Price appreciation, which accelerated over the first half of the year, slowed in the second half but ticked up again in December and January, according to Redfin's data. In April, prices rose 18.7 percent over the year. In October, price appreciation was down to 12.6 percent.
West Coast markets experienced the greatest price appreciation in January, according to Redfin's observation of its markets. Prices rose most in Las Vegas, Nevada (24.6 percent); Ventura, California (21.1 percent); and Riverside, California (21 percent).
Of the 19 markets, inventory dropped most in Boston, Massachusetts (-31.8 percent); Chicago, Illinois (-25.6 percent); and Portland, Oregon (-24.4 percent).