Entry-level shoppers looking at homes in the lower price tier can expect a tighter market this spring compared to shoppers in the middle and upper price tiers.
According to Zillow, home values in the bottom third of the price distribution saw 8 percent annual appreciation in March. Led by Richmond, Miami, New Orleans, and Louisville, low price-tier home values gained 10 percent since last year.
The report points out that the pandemic accelerated entry-level home growth such that buyers who were not ready or able to take advantage of historically low interest rates will find themselves in a significantly more expensive market with less purchasing power now.
On the other side of the home pricing scale, top price tier homes fell by 1 percent for the first time in over a decade.
There are also significantly less entry-level homes on the market, especially in California. Zillow found that the West Coast stands out for its scarcity of new listings, with San Jose, San Francisco, Sacramento, Portland, and Seattle bringing in the least new inventory for entry-level shoppers. All markets with less than half the new listings in March they had last year.