Home Contract Times Continue to Shrink

Redfin, Seattle, said typical homes sold in May went under contract in just 37 days, breaking the previous record of 40 set in April.

Redfin said Denver was the fastest market for the third month in a row, with nearly half of all homes pending sale in just six days. Seattle ranked next with seven median days on market, followed by Grand Rapids, Mich. (8), Portland, Ore. (8) and Omaha, Neb. (9).

“There is still a lot of momentum in home prices in many metros, not only on the coasts but also in places like Buffalo, Grand Rapids and Omaha,” said Redfin chief economist Nela Richardson. “Strong local economic growth and burgeoning demand from older millennials are accelerating home-price growth in this very competitive, low-inventory pre-summer market.”

Richardson said the Federal Reserve’s latest announcement to raise short-term rates should have very little effect on buyer demand or on the overall housing market. “If anything, it may motivate buyers to make their purchases sooner rather than later,” she said.

The report said U.S. home prices rose by 6.8 percent to a median sale price of $288,000 in May, Home sales increased by 7.5 percent over last year, despite a long-standing shortage in the supply of homes. The number of homes for sale fell by 10.9 percent, leaving just 2.7 months of supply, the lowest supply Redfin has recorded since tracking the market in 2010. Redfin said six months is generally considered a market balanced between buyers and sellers.

Redfin said the median sale-to-list price ratio set another record, hitting 95.4 percent in May.

Other report highlights:

–The most competitive market in May was San Jose, Calif., where 74.1% of homes sold above list price, followed by 70.9% in Oakland, 70.1% in San Francisco, 64.1% in Seattle and 51.8% in Tacoma, Wash.

–Seattle had the nation’s highest price growth, rising 15.9% since last year to $510,000. Lakeland, Fla., came next at 15.1%, followed by Tampa (13.2%), Memphis, Tenn. (13%), and Manchester, N.H. (12.2%). Two metros saw slight price declines in May: Albany, N.Y. (-0.9%), and Baton Rouge, La. (-0.6%).

–In 29 out of 89 metros, sales surged by double digits from last year. Poughkeepsie, N.Y., led the nation in year-over-year sales growth, up 44.4%, followed by Memphis, up 40.2% and Philadelphia, up 28.3%. Rochester, N.Y., saw the largest decline in sales since last year, falling 14.3%. Home sales in Santa Rosa, Calif., and Buffalo, N.Y., declined by 11.2% and 10.3%, respectively.

–Rochester saw the largest decrease in overall inventory, falling 35.7% since last May. Buffalo (-31.9%), San Jose (-31.0%) and Seattle (27.1%), also had far fewer homes available on the market than a year ago.

–Ogden, Utah had the highest increase in the number of homes for sale, up 41.4% year over year, followed by Provo, Utah (34.9%) and Fort Myers, Fla. (27.3%).