ZILLOW: America's red-hot housing market is a bit of a problem (ZG, Z)

The rise in US house prices since the recession has created a market favorable for sellers.
Although the recovery has also been good to buyers, they're faced with fewer non-luxury choices in major cities.
More Americans think it's a better time to sell a house than to buy, according to Fannie Mae. That wasn't the case for much of the past seven years.

The recovery in US house prices since the recession has created a so-called seller's market.

In this part of the cycle, housing inventory is tight, especially in big cities where there's plenty of demand. But buyers in these markets are getting stretched as prices climb above their prerecession highs and choices remain limited.

Zillow CEO Spencer Rascoff captured this split well during the company's earnings call with analysts on Tuesday. Real estate agents and the Zillow products they use for buyer clients are feeling the pinch of tighter housing inventory. But it's not quite the same for sellers:

Rascoff said (emphasis ours):

"Housing overall is very strong, which is to say it's a seller's market, home values are appreciating more than 5% year-over-year. We are — the market is inventory constrained in most major cities. That puts pressure on buyer agents on lead conversion, meaning that a buyer lead is a less valuable if a buyer's agent has to work with that buyer for two, three, six, 10 months and write 10 or 20 offers before their offers are being accepted because inventory is so tight.

"So in some ways the hot housing market is a bit of a headwind on our business, because it takes longer to convert a buyer lead. And that having been said our listing lead generation business Seller Boost and Premier Agent Direct benefits from the tight listing environment. And our new construction business benefits materially from the inventory constraints because homebuilders are anxious to market re-listings on our platforms to sell those new homes."

Home prices continue to rise nationwide at about a 6% annual rate, and Case-Shiller's National Home-Price Index reached a new all-time high for a ninth straight month in August. Prices are rising because of low interest rates, a healthy labor market, and available financing, all of which are creating demand. At the same time, supply is tight in major cities.

All this weighing on buyers and their agents.

In April,