Recently there has been plenty of buzz about the noticeable drop in homes for sale. The reduced number of properties available subjects home buyers to bidding wars and headaches despite low home prices. We’ve decided to shed some light by analyzing our inventory numbers to answer two key questions for major metropolitan areas across the United States: How far has the number of homes for sale dropped from this time last year, and is the drop in supply the same whether you’re after a high-end or low-end home? To do this we counted all homes listed on Zillow.com as of Sept. 30, 2012, broke down those counts into the bottom, middle and top price tier groups for each major metro area and compared those numbers to Zillow.com listings on Sept. 30, 2011.
For the United States as a whole the supply of homes for sale is 19.4 percent lower than last year with the greatest inventory reductions among top-tier properties (22.0 percent lower), followed by middle-tier homes (18.6percent lower) and then bottom (15.3 percent lower). About a third of the 99 metros analyzed also exhibited this pattern. A selection of the largest of these includes Tampa, Philadelphia, Cleveland, Cincinnati and Portland, OR. Another third of the metropolitan areas covered in this project show the opposite pattern; the greatest change in the supply of homes on the market is among properties with prices in the bottom tier. Among these are the metro areas with the largest overall changes in inventory: Fresno (-49.4 percent overall; -59.7 percent among the bottom tier), Salt Lake City (-46.4 percent overall; -50.8 percent among the bottom tier), Sacramento (-42.4 percent overall; -55.4 percent among the bottom tier) and San Francisco (-42.2 percent overall; -53.2 percent among the bottom tier). Interestingly, all 11 California metros Zillow examined fall into the 16 metros with the greatest overall drop in inventories.
Not every metro has seen declines in inventory. Little Rock, AR stands as the reigning champion, the only metro with increasing inventories overall, albeit by a very small amount (+0.4 percent). While none of the major metros have seen an increase in the supply of top-tier homes, four have increased inventories in the bottom price tier including Louisville-Jefferson County, KY (+13.2 percent), Little Rock, AR (+7.2 percent), Columbia, SC (+6.1 percent) and Hartford, CT (+1.4 percent). Boise City, ID and Little Rock, AR are the only two with an increase in the supply of middle-tier homes since last September with +8.7 percent and +3.1 percent, respectively.