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Unprecedented Housing Shortage Nationally and Locally

published on March 16, 2021

There are almost 450,000 fewer homes on the market in the United States than at this time last year, according to a® report, and this is putting tremendous upward pressure on prices. In January, national housing inventory dropped 43 percent compared to January 2020, with new listings down 23 percent. This resulted in the national median price increasing 15.4 percent to $346,000 that month.

Among the largest 50 United States metropolitan areas, Austin prices increased the most, with a 30.2 percent increase. Austin was followed by Rochester, New York at 25.9 percent and Los Angeles at 22.4 percent.

In the report,® Chief Economist Danielle Hale said, “We’ve seen a lot of companies announce relocations to Austin. It’s also benefiting from additional flexibility and remote work. It has a unique culture and this really vibrant tech scene making it an attractive place to live, and it’s got a really strong local economy.”

Home prices in the Northeast U.S. increased the most at 16.8 percent, with the West at 12.3 percent, the Midwest at 10.4 percent, and the South at eight percent.

Hale said of the overall national market, “It’s tough for buyers, particularly first-time buyers dealing with limited options and fast-rising prices. We’re looking at an all-time low number of homes for sale and record numbers of buyers trying to get into the market.”

Silicon Valley’s San Jose, California and San Francisco were the only places to see surges of inventory, with a 24.8 percent and 14.4 percent annual increase, respectively, in homes for sale in January.

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