Homes scarce as season for buying heats up

ALEX VEIGA
The Associated Press

Anyone eager to buy a home this spring probably has reasons to feel good. The job market is solid. Average pay is rising. And mortgage rates, even after edging up of late, are still near historic lows.

And then there’s the bad news: Just try to find a house.

The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first-time buyers and in markets where prices have risen sharply.

In markets such as San Diego, Boston and Seattle, competition for a dwindling supply has escalated along with pressure to pay more and accept less favorable terms.

“Sellers will have the edge again this year,” said Ralph McLaughlin, chief economist for Trulia, a real- estate data provider. “Homebuyers are really going to be scraping the bottom of the barrel as far as housing choice is concerned.”

In this Thursday, March 30, 2017, photo, Kathleen Mulcahy stands in her recently sold one-bedroom condo, on which she received nearly two dozen offers and sold for more than $100,00 over her asking price, in Seattle's Belltown neighborhood. Many would-be buyers, especially in the big cities, will be wading into a market that's crowded with rival buyers and constrained by the lowest inventory of homes for sale in nearly two decades. That severe imbalance between supply and demand favors sellers, but also gives homeowners little incentive to part with their properties. (AP Photo/Elaine Thompson)

The intensity of the competition this spring has surprised sellers such as Kathleen Mulcahy, a 37-year-old Seattle product manager.

Within a week of listing her one-bedroom, one-bath condo, Mulcahy received 21 offers — all above her asking price of $398,000. Most of the offers came with built-in triggers to automatically rise in case a rival bidder sweetened a bid. In the end, she accepted an offer of $500,000 — all cash.

“A lot more than I expected,” Mulcahy said.

About 1.75 million homes were for sale nationally at the end of February, according to the National Association of Realtors. That’s down 6.4 percent from a year earlier and only slightly up from January, when listings reached their lowest point since the association began tracking them in 1999. All told, the supply of homes for sale has fallen on an annual basis for the past 21 months.