Housing Demand at Record Level
Redfin, Seattle, said its Housing Demand Index increased by 11.3 percent in May to its highest level since it began tracking such data.
The May reading came in at 136. A level of 100 represents the historical average for the three-year period from January 2013 to December 2015.
The index tracks Redfin customers requesting home tours and writing offers. Compared to April, buyers requesting tours rose by 9.0 percent in May; the number of buyers writing offers increased by 15.4 percent.
The report said the surge in demand contrasted starkly with declining housing inventories. Inventory fell by nearly 12 percent in May from a year ago in the 15 metros covered by the Demand Index. May marked the 24th consecutive month of year-over-year inventory declines despite a 4.2 percent increase in the number of homes newly listed for sale.
Redfin Chief Economist Nela Richardson said this means that people are buying up homes faster than they are being listed.
“On paper, the numbers we’ve been presenting all year make the market look like a seller’s haven,” Richardson said. “But very often sellers are buyers too. Sellers in hot markets can quickly generate several competing offers, but what they really need to be on their way to their next home purchase is a committed buyer who will make it to the closing table without delays or hassles.”
The report said Washington, D.C., which had been slower over the past year, posted the highest demand in May, 172. Redfin said May saw an unusually high number of buyers touring homes and making offers compared with the baseline set for the market from 2013 through 2015. The number of local buyers requesting home tours was up 87.9 percent from last year and 40 percent more people were making offers.
By contrast, California, which had been red-hot, posted lower demand in May. Los Angeles (106), San Francisco (108) and Oakland (105) looked “relatively calm” in May. Redfin Data Scientist Time Decker noted these metros are also among the nation’s most expensive. “High prices tamp down demand and keep many buyers out of the market,” he said.
