San Diego real estate
A for-sale sign on a Mission Hills home.

The home shopping season appears to be in full swing, driving up prices as anxious buyers outnumber dwindling sellers, according to a Zillow market report.

With inventory at record low levels in December, the limited supply is pushing price growth, as monthly home value appreciation accelerated for the first time since July. 

A Zillow survey indicates homeowners could be hesitating due to the resurgence in COVID-19 cases and employers’ rising uncertainty about post-pandemic work arrangements.   

“Home shoppers picked the shelves clean this December, leaving fewer active listings than ever before in the U.S. housing market,” said Jeff Tucker, a Zillow senior economist. “Enough determined buyers kept up their house hunt to re-ignite monthly price appreciation. Rising mortgage rates could be the next potential headwind, but demand has proven persistent; neither high prices nor slim inventories have deterred buyers so far.”

In San Diego, home prices rose to $834,199 – up 23.6% year over year – in the Zillow index, far outpacing national growth. Locally, for-sale inventory fell by nearly 30%, also ahead of the national pace.

Other California and Southwest markets were just as hot, as values rose by:

  • Riverside – 26.2% to $534,393
  • Los Angeles – 17.9% to $868,350
  • Phoenix – 31.8% to $427,451
  • Las Vegas – 26.8% to $395,943

Austin led the country in growth in home values, at 44.6%, to $545,850.

In the U.S., the typical home value is $320,662, almost 20% higher than December 2020. The annual growth rate represents an all-time high in data that dates back more than 20 years.

Upward pressure on prices is likely due to low levels of inventory. After slipping in November, inventory plunged in December, dropping 11.1% in a month to a new record low – about 923,000 homes.

Nationally, buyers shopping in December had 19.5% fewer homes to choose from than they did a year before, when inventory was already at a record low.

Compared to December 2019, there are now 40.5% fewer homes available for sale.

New inventory typically slips at year end, but the 18.9% monthly drop seen last month was the largest in three years. The rise of the Omicron variant could be partially responsible, Zillow researchers suggested, pushing homeowners to wait for infection rates to subside before listing.