
Reports Cite Increases in Home Sales
Despite a tepid summer for the housing market, two reports suggest home sales are on the uptick.
Redfin, Seattle, reported home sales rose by 4.1% in July as more housing inventory came on line (it also reported home price rose by 5.3% annually in July, continuing a trend of moderate growth). And RE/MAX, Denver, said July home sales rose by 1.8% year-over-year, despite record-high home prices.
Redfin said U.S. home-sale prices increased to a median of $307,400 in July; it said the price growth rate fell for the fifth consecutive months and has not been this low since September 2016. The number of homes for sale in July fell by 5.4% year over year, marking the third month of supply declines at or near 5 percent, following 19 months of inventory declines of over 7 percent.
RE/MAX reported a median sales price of $250,575 in July, up 4.4% from a year ago and represents the third-highest price in report history, topped only by this past May and June. Months’ supply of inventory was at 2.9, the smallest total ever recorded for July. Forty-two of 54 metro areas reported a year-over-year drop in inventory. Days on market dropped to 41–four days less than a year ago and one day under the previous nine-year low set in June.
Redfin said homes sold in July went under contract in a median 35 days, three days faster than last year and one day slower than in June. However, it noted while homes are still selling near a record-fast pace, there are some signs competition is waning. For the first time since March 2015, the share of homes that sold above asking price declined year over year from 26.5 in July 2017 to 26.2 percent last month. Twenty-eight percent of homes on the market in July had a price drop, the largest share on record since Redfin began tracking this metric in 2009, and a 3.2 percentage-point increase over last July. Redfin said the share of homes with price drops typically peaks each year in July or August.
The reports noted similarities at the metro level as well. Redfin reported for the second month in a row, inventory increased year over year by double digits in San Jose, Calif., (28.0%) Seattle (27.0%) and Portland (21.8%). These markets also experienced sales declines of 11.9 percent, 6.4 percent and 6.1 percent, respectively. In Portland, homes took a median 15 days on market to sell, a full week longer than last July. In San Jose (16) and Seattle (9), it took one and two days longer, respectively, for homes to find a buyer this July compared to last year.
Redfin said home prices continued to rise in these metros year over year, but at a slower rate. In Portland, home prices rose by 4 percent year over year, the lowest price growth in 41 months. Seattle home prices increased 8 percent compared with last year, the lowest growth in 27 months. San Jose home prices grew 19.3 percent. While still the highest growth of any metro Redfin tracks, this was the lowest price growth San Jose has seen in nine months.
“The Bay Area, Seattle and Portland have been so competitive for so long that buyers and sellers have adjusted to those conditions and may feel uneasy about the changes we’re seeing in the market,” said Taylor Marr, Redfin senior economist. “After several years of shrinking inventory and unsustainable price growth, I’m encouraged by these changes as a signal that we may be returning to a healthier, more balanced market.”
Other Redfin report highlights:
–Grand Rapids, Mich., was the fastest market, with half of all homes pending sale in just eight days, down from 11 days from a year earlier. Boston, Denver and Seattle were the next fastest markets with nine median days on market, followed by Indianapolis (10).
–The most competitive market in July was San Francisco where 76.3% of homes sold above list price, followed by 71.7% in San Jose, 70.0% in Oakland, 51.3% in Tacoma, Wash. and 50.8% in Boston.
–San Jose saw the nation’s highest price growth, rising 19.3% since last year to $1.163 million, followed by Detroit at 15%, Tacoma (12.7%), Memphis, Tenn. (12.5%) and Salt Lake City (12.2%). Two metros saw price declines in July: Camden, N.J. (-0.9%), and Baltimore (-0.5%).
–Thirteen of 73 metros saw sales surge by double digits from last year. Baltimore led the nation in year-over-year sales growth, up 55.1%, followed by Camden, up 40.8% and Oklahoma City at 20.1%. Miami saw the largest decline in sales since last year, falling 17.9%.
–San Jose saw the highest increase in the number of homes for sale, up 28.0% year over year, followed by Seattle (27.0%) and Portland (21.8%).Las Vegas had the largest decrease in overall inventory, falling 33.6% since last July.
RE/MAX reported of 54 metro areas surveyed in July, the average number of home sales was down 8.7% compared to June, but increased by 1.8% from. Thirty-seven metro areas experienced an increase in sales year-over-year, including Billings, Mont., 27.4%; Tulsa, Okla., 13.2%; Richmond, Va., 12.9%; and Pittsburgh, 11%.
RE/MAX said metros with lowest days on market were Seattle at 19, Omaha, Neb., at 20, and Denver and San Francisco at 22. Highest days on market averages were in Augusta, Maine at 89, Miami at 83, Hartford, Conn., at 76 and Manhattan at 65.
The report said homes for sale in July fell by 0.3% from June and by 7.8% from a year ago. All but one of 54 metro areas surveyed reported a months’ supply at or less than a “balanced” 6.0, which is typically considered a seller’s market. Markets with the lowest Months’ supply of inventory are San Francisco and Boise, Idaho at 1.4, Denver at 1.5 and Salt Lake City at 1.6.