The supply of residential properties available for purchase dropped 8.6 percent over the past year, according to new data released by Zillow—and the three-month low in January’s housing starts may not bode well for this year’s inventory. The inventory shortage is more pronounced in some areas: “If you’re looking for a home or trying to sell, it’s important to know what kind of market you’re in,” said Zillow Chief Economist Svenja Gudell. “Hopeful buyers in a strong sellers’ market should be prepared to move quickly, since homes don’t stay on the market as long. In a buyers’ market, they can afford to take their time and be more selective. However, 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.” But for those already in homes, there was good news: The latest Zillow Home Value Index reported values rose year-over-year last month by 4.2 percent, marking the tenth straight month of home value appreciation.

The Zillow index now stands at $184,000. Source: National Mortgage Professional