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The tightest housing markets in the U.S. are unwinding in time for the key spring selling season, giving buyers an edge for the first time in years.
San Jose, at the heart of California’s Silicon Valley, had the biggest gain in inventory in the first quarter, jumping 55% from a year earlier, according to a study by Trulia of the 50 largest metropolitan areas. Seattle, Salt Lake City and San Francisco followed. At the same time, the number of listings is shrinking in cheaper markets, led by Washington; Baltimore; Kansas City, Mo.; and Oklahoma City.
Homes in many previously hot areas are piling up as demand cools. Buyers stepped back last year after a spike in mortgage rates exposed an affordability crisis, especially in western urban centers where bidding wars were the norm. Now, even as borrowing costs have dropped back down, sales have been slow to rebound.
“West Coast markets were getting slammed — affordability was slipping away from everybody,” said Felipe Chacon, a housing economist for Trulia. “Now it’s showing signs of shifting back the other way, in favor of buyers.”
While the supply of listings dropped slightly nationwide, it was a mixed bag on the local level. Inventory grew in more than half the 50 largest metros, including Los Angeles; Denver; Nashville, Tennessee; Atlanta; Dallas and Boston.
That doesn’t mean buyers will have it easy this spring. In some areas, they’ll still have to act relatively fast.
In San Jose, for example, homes that sold in the first quarter were listed for only 57 days. That was one of the fastest paces in the study, but up from 40 days a year earlier. Also, the data only capture timing for properties that sold in the period. Others in the still-available supply have probably languished longer, Chacon said.