The inventory of homes for sale in the U.S. declined in January, while home prices continue to rise, according to a new Zillow report.
Inventory of for-sale homes fell 8.6% in January, compared to a year earlier, Zillow said in its monthly Real Estate Market Reports. Inventory fell 30% in San Diego, the fastest rate among the U.S. metro areas included in Zillow's study.
Moreover, January marked a three-month low in housing starts, indicating that overall inventory levels won't get a significant benefit from newly built homes.
The constricted number of homes for sale could lead to increased competition and bidding wars, pricing out entry-level or first-time buyers.
"Hopeful buyers in a strong sellers' market should be prepared to move quickly, since homes don't stay on the market as long," Svenja Gudell, Zillow's chief economist, said in a news release.
"Low inventory is a factor affecting the majority of the country, so buyers should be prepared for a limited selection as we enter the home-buying season."
San Jose, Calif., was ranked by Zillow as the top sellers' market in the U.S., based on inventory, number of days on the market and price cuts. It was followed by San Francisco, Denver, Seattle and Nashville, Tenn.
Philadelphia, Chicago, Baltimore, Hartford, Conn., and New York were the top five buyers' markets.
