The stock of available homes throughout the nation has taken a dip over the past four years, but that doesn’t mean prices are hiking in all markets, according to Trulia. The website’s Inventory and Price Watch report offers insight into localized inventory levels and affordability broken down by sectors: starter homes, trade-up homes and premium homes — and while California unsurprisingly has higher prices because of low inventory, an even larger metro hasn’t seen the same effects.
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The report looks at the national housing stock in the 100 largest metros between April 1, 2015, through April 1, 2016, finding that home inventory is down throughout the nation by more than 6 percent. Out of the three sectors measured, starter homes saw the biggest dip.
Inventory of starter homes fell 12.3 percent in the past year leading up to April 2016, and the share of starter homes fell from 25.6 percent to 23.9 percent. And, unfortunately for buyers, with the fall of inventory comes the rise of prices. Starter homes are costing homebuyers 1.3 percent more than they were last year.
The median list price for a starter home is $157,072, the report says, which means that buyers need to spend about 37.5 percent of their income on a home. That’s more than a 10 percent larger portion of one’s income that is needed for a trade-up home.
In the past year, the ratio of income needed for a home increased by 0.8 percent for trade-up buyers, 0.5 percent for premium buyers and 1.3 percent for starter home purchasers.
Although stater homes experienced a high decrease in inventory, premium home inventory only dipped 0.2 percent.
The Bay Area is prominent on the list of markets with the largest decrease in starter home affordablity. Oakland, San Jose and San Francisco ranked no. 1, no. 3 and no. 6, respectively. Sacramento and Los Angeles also ranked high on the list, which was entirely comprised of West Coast and Gulf Coast metros.
In Oakland, starter home buyers now need 8.3 percent more of their income to purchase a home than they did last year, or 73.9 percent. And in San Francisco, starter home buyer income needed is 113.6 percent, an annual increase of 6 percent.
Los Angeles homebuyers need to shell out 89.4 percent of their income, which is 5.6 percent more than it was last year.
But falling inventory isn’t making a major impact on home prices everywhere throughout the nation. In Columbia, South Carolina, home inventory fell 22.2 percent but prices fell 0.9 percent. In nearby Charleston, home prices dipped 5.1 percent along with a 21 percent dip in inventory.
In the Big Apple, there are 14.8 percent fewer starter homes on the market, or 10,315 homes. Despite the fall, prices on starter homes in New York fell 0.5 percent.
