- Prices rose by 8% annually for the least-expensive one-third of
houses; the most-expensive homes lost value for the first time in
more than a decade.
- The recent uptick in inventory hasn't included the
least-expensive houses — bottom-tier inventory is up just 1% from
last year, compared to a 13% boost for top-tier homes.
SEATTLE, April 20,
2023 /PRNewswire/ -- Entry-level home shoppers are
dealing with faster-rising prices and more competition than those
after more-expensive homes, a new Zillow®
analysis finds.
"Buyers shopping for the least-expensive homes this spring
aren't noticing much difference from the pandemic-era market heat,"
said Skylar Olsen, Zillow's chief
economist. "Competition is fierce, but there aren't many homes for
sale, so buyers should be patient but prepared to move quickly and
anticipate a bidding war once they find a home they love."
Typical home values for the least-expensive one-third of houses
rose 8% – nearly $13,000 – over the
past year. Mid-level homes appreciated by 3% and the most-expensive
houses depreciated by 1%, the first loss of value for the top tier
since 2012.
Entry-level homes have exploded in value over the course of the
pandemic across the U.S., gaining at least 60% more value since
February 2020 in seven of the 50
largest markets, with Tampa,
Richmond and Charlotte leading the
charge.
Mortgage-interest rate hikes do more damage to monthly payments
as home prices rise. This helps explain why top-tier home values
are falling fastest annually in some of the most-expensive markets:
San Francisco (-14%), San Jose (-11%) and Seattle (-11%).
A slight annual recovery in inventory has left out entry-level
shoppers. There are just 1% more homes available for sale in the
bottom price tier compared to 8% and 13% more in the slower-moving
middle and top tiers, respectively.
Rate lock — the effect of relatively high mortgage rates
dissuading current homeowners from selling — is contributing to a
lower flow of new listings across price tiers. March saw record-low
new listings for this time of year, down 22% from last year. But
rate lock is having the biggest impact on entry-level buyers in
expensive West Coast markets. San
Jose, San Francisco,
Sacramento, Portland and Seattle all have fewer than half as many new
bottom-tier listings in March compared to last year.
In the recent past, entry-level shoppers had an easier time
finding discounts than their well-heeled colleagues, but that
comparative benefit is gone now, too. The share of mid- and
top-tier homes that sold above list price rose far above the
bottom-tier share through most of the pandemic. Super-low rates had
cranked up demand for more-expensive houses. But after mortgage
rates peaked at 7% last fall, the share sold above list price for
all three tiers converged; now they're tracking together.
Metropolitan
Area*
|
Bottom Tier
Zillow Home
Value Index
(ZHVI)
Change, Year
over Year
(YoY)
|
Top Tier
ZHVI
Change,
YoY
|
Bottom Tier
ZHVI Change
Since Pre-
Pandemic
|
Top Tier
ZHVI Change
Since Pre-
Pandemic
|
Bottom Tier
Inventory
Change,
YoY
|
Top Tier
Inventory
Change,
YoY
|
United
States
|
8 %
|
-1 %
|
48 %
|
33 %
|
1 %
|
13 %
|
New York, NY
|
5 %
|
0 %
|
34 %
|
19 %
|
-24 %
|
-9 %
|
Los Angeles,
CA
|
0 %
|
-6 %
|
35 %
|
28 %
|
-18 %
|
2 %
|
Chicago, IL
|
6 %
|
0 %
|
40 %
|
19 %
|
-19 %
|
-13 %
|
Dallas, TX
|
2 %
|
-1 %
|
44 %
|
40 %
|
3 %
|
15 %
|
Houston, TX
|
4 %
|
2 %
|
41 %
|
33 %
|
12 %
|
28 %
|
Washington,
DC
|
3 %
|
-2 %
|
26 %
|
22 %
|
-32 %
|
-3 %
|
Philadelphia,
PA
|
8 %
|
4 %
|
43 %
|
31 %
|
-7 %
|
-12 %
|
Miami, FL
|
16 %
|
6 %
|
64 %
|
54 %
|
18 %
|
48 %
|
Atlanta, GA
|
6 %
|
1 %
|
64 %
|
39 %
|
-1 %
|
9 %
|
Boston, MA
|
4 %
|
-1 %
|
34 %
|
24 %
|
-32 %
|
4 %
|
Phoenix, AZ
|
-2 %
|
-3 %
|
46 %
|
40 %
|
1 %
|
55 %
|
San Francisco,
CA
|
-5 %
|
-14 %
|
26 %
|
16 %
|
-37 %
|
2 %
|
Riverside,
CA
|
1 %
|
-4 %
|
48 %
|
34 %
|
0 %
|
15 %
|
Detroit, MI
|
5 %
|
1 %
|
54 %
|
27 %
|
9 %
|
-2 %
|
Seattle, WA
|
-3 %
|
-11 %
|
35 %
|
32 %
|
-32 %
|
6 %
|
Minneapolis,
MN
|
1 %
|
-1 %
|
26 %
|
23 %
|
-22 %
|
8 %
|
San Diego,
CA
|
1 %
|
-6 %
|
41 %
|
43 %
|
-38 %
|
-1 %
|
Tampa, FL
|
8 %
|
2 %
|
69 %
|
51 %
|
26 %
|
59 %
|
Denver, CO
|
-1 %
|
-5 %
|
29 %
|
25 %
|
-4 %
|
47 %
|
Baltimore,
MD
|
8 %
|
2 %
|
35 %
|
25 %
|
-7 %
|
-12 %
|
St. Louis,
MO
|
8 %
|
2 %
|
45 %
|
27 %
|
2 %
|
-1 %
|
Orlando, FL
|
8 %
|
3 %
|
53 %
|
43 %
|
12 %
|
41 %
|
Charlotte,
NC
|
7 %
|
1 %
|
65 %
|
45 %
|
30 %
|
29 %
|
San Antonio,
TX
|
5 %
|
1 %
|
43 %
|
37 %
|
42 %
|
63 %
|
Portland, OR
|
-1 %
|
-4 %
|
30 %
|
25 %
|
-32 %
|
11 %
|
Sacramento,
CA
|
-3 %
|
-7 %
|
32 %
|
24 %
|
-36 %
|
2 %
|
Pittsburgh,
PA
|
0 %
|
0 %
|
45 %
|
21 %
|
-6 %
|
9 %
|
Cincinnati,
OH
|
9 %
|
3 %
|
52 %
|
32 %
|
-17 %
|
3 %
|
Austin, TX
|
-6 %
|
-8 %
|
48 %
|
45 %
|
30 %
|
95 %
|
Las Vegas,
NV
|
0 %
|
-5 %
|
34 %
|
27 %
|
9 %
|
38 %
|
Kansas City,
MO
|
7 %
|
2 %
|
51 %
|
31 %
|
5 %
|
12 %
|
Columbus, OH
|
8 %
|
3 %
|
54 %
|
33 %
|
-10 %
|
16 %
|
Indianapolis,
IN
|
6 %
|
1 %
|
57 %
|
37 %
|
8 %
|
32 %
|
Cleveland,
OH
|
6 %
|
4 %
|
47 %
|
30 %
|
-1 %
|
2 %
|
San Jose, CA
|
-1 %
|
-11 %
|
31 %
|
24 %
|
-54 %
|
16 %
|
Nashville,
TN
|
6 %
|
-1 %
|
55 %
|
48 %
|
25 %
|
67 %
|
Virginia Beach,
VA
|
8 %
|
3 %
|
40 %
|
29 %
|
-16 %
|
-9 %
|
Providence,
RI
|
6 %
|
2 %
|
42 %
|
35 %
|
-34 %
|
-13 %
|
Jacksonville,
FL
|
7 %
|
2 %
|
61 %
|
51 %
|
49 %
|
63 %
|
Milwaukee,
WI
|
8 %
|
3 %
|
39 %
|
21 %
|
-32 %
|
-21 %
|
Oklahoma City,
OK
|
10 %
|
4 %
|
56 %
|
31 %
|
-9 %
|
77 %
|
Raleigh, NC
|
4 %
|
0 %
|
54 %
|
43 %
|
2 %
|
66 %
|
Memphis, TN
|
8 %
|
2 %
|
62 %
|
35 %
|
7 %
|
36 %
|
Richmond, VA
|
21 %
|
-3 %
|
67 %
|
21 %
|
-12 %
|
-8 %
|
Louisville,
KY
|
10 %
|
2 %
|
47 %
|
27 %
|
-6 %
|
2 %
|
New Orleans,
LA
|
11 %
|
-1 %
|
34 %
|
17 %
|
49 %
|
48 %
|
Salt Lake City,
UT
|
-2 %
|
-5 %
|
43 %
|
36 %
|
6 %
|
66 %
|
Hartford, CT
|
9 %
|
5 %
|
43 %
|
31 %
|
-32 %
|
-9 %
|
Buffalo, NY
|
4 %
|
2 %
|
41 %
|
28 %
|
-1 %
|
-2 %
|
*Table ordered by
market size
|
About Zillow Group
Zillow Group, Inc.
(NASDAQ: Z and ZG) is reimagining real estate to make it easier to
unlock life's next chapter. As the most visited real estate website
in the United States, Zillow® and
its affiliates offer customers an on-demand experience for selling,
buying, renting, or financing with transparency and ease.
Zillow Group's affiliates and brands include Zillow®; Premier
Agent®; Zillow Home Loans℠; Zillow Closing Services℠; Trulia®; Out
East®; StreetEasy®; HotPads®; and ShowingTime+℠ , which includes
ShowingTime®, Bridge Interactive®, and dotloop® and Listing Media
Services. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org).
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SOURCE Zillow