The inventory of homes on the market in the United States has been tight for two years. Demand has been so high that homes for sale have often had more than one bid. In some cases, sellers have received more than their asking price. In some cities, supply has tightened so much in the past year that the number of homes for sale has plummeted by 10% or more. In Honolulu, the number in August had fallen by 44% year over year, much more than any other metropolitan area.
People moved at accelerated rates in the United States for two reasons. The first is that the interest rate for 30-year fixed-rate mortgage loans dropped below 3%, which made housing more affordable. Additionally, working from home allowed people to move to cities where they wanted to live rather than those where they had to work.
Realtor.com’s recent Inventories Are Rising Almost Everywhere but Here: The 10 Cities Where Homes for Sale Are Still Plummeting report points out that two types of markets had tight inventory: “It’s especially prominent in some vacation areas and cheaper metros in the Midwest and Northeast.”
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Inventory dropped a remarkable 44.7% in Honolulu in August, compared to the same month of last year. The market is unusually expensive. The median home listing price in August was $832,500, over double the national figure. According to Realtor.com, “Second-home buyers from the U.S. mainland, Korea, Taiwan, Hong Kong, and Australia, along with investors from California and elsewhere, have been snapping up short-term rentals to get in on the island’s post-COVID-19 travel boom.”
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Honolulu was followed by several markets where home prices are low. Inventory dropped 24.4% in Hartford, Connecticut, where the median price for a home on the market was only $372,400. That is below the national figure. It was followed by Syracuse, New York, where the median home price was only $219,900. Inventory in the city fell by 16.2%. In Milwaukee, inventory dropped 11.8% and the median price of a home listed for sale was only $354,950.
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