Redfin: June Supply of Homes Down 1st Time in 10 Months
Homes for sale nationally fell by 0.3 percent annually in June, the first annual decline since last September, reported Redfin, Seattle.
But the report (https://www.redfin.com/blog/the-inventory-crunch-is-back/) also noted a huge amount of regional variation. Redfin noted some some expensive markets, such as San Jose, Seattle and Boston, continue to see big gains in for-sale home inventory, while affordable markets such as Oklahoma City, Buffalo and Memphis have already experienced big declines.
“This marks the end of a brief respite for buyers in this years-old seller’s market,” the report said. “If supply growth continues falling at the rate it has been since April, by September the number of homes for sale will be down from a year earlier by more than 4 percent.”
Redfin reported as of late June, 32 of the 46 largest U.S. metro areas had fewer homes for sale compared to a year earlier. In Oklahoma City, where the median price of homes sold in May was just $184,900, had 15.3 percent fewer homes for sale in late June compared to a year earlier and has not seen year-over-year growth since going negative in late 2016.
In contrast, the report said most of the big gains in the national count of homes for sale over the past year have been driven by expensive metro areas with median prices well above the national median. San Jose (up 43.6%, median price $1.175 million), Seattle (up 21.9%, median price $592,500) and Boston (up 21.3%, median price $517,000) gained the most homes for sale compared to a year earlier. However, even in those markets, the rate of growth has fallen off dramatically from where it was in late 2018, contributing to the decline in the national rate of inventory growth.
“Lower interest rates are bringing buyers back, but without enough homes for sale to meet demand, we expect to see more bidding wars, which will push prices up this summer,” said Redfin chief economist Daryl Fairweather. “We expect small, inland markets where a typical home is still affordable for a middle-class family to heat up the most. Those markets, like Knoxville and Akron, are already experiencing double-digit annual price growth, and there is a lot of room for prices to continue to grow. Expensive metros like San Jose and Seattle may see moderate price growth this summer, but for the most part those markets have already peaked.”
The report said in San Francisco, where a recent series of high-value tech IPOs has already led to a surge in bidding wars, the number of homes for sale rose by 12 percent from a year ago, far less than San Jose or Seattle. Supply growth is down from a high of over 60 percent in late December, indicating that San Francisco is transitioning from a sharp cooldown back to a hot market.
