Redfin: May Real Estate Market the Fastest on Record; Prices Up 6.3%

Redfin, Seattle, said the typical home sold in May went under contract in 34 days, breaking April’s record of 36 days.

And fueled by low housing inventories, Redfin reported the national median home sale price rose to $305,600, a 6.3 percent increase from a year ago across the 174 markets that Redfin tracks.

Inventory did improve from a year ago, Redfin said, albeit slightly: newly listed homes for sale increased by 4.3 percent from a year ago, driving a 3.6 percent increase in the number of homes sold. However, the overall supply of homes declined by 5.4 percent during the same period. Just 2.5 months of supply remained at the end of the month, compared to the six months that generally signals a balanced market.

Redfin also reported among homes that sold in May, 27.6 percent sold above their list price, the highest percentage Redfin has recorded, indicating strong competition for the few homes available. At the same time, nearly a quarter of homes for sale had a price drop in May, the highest percentage of price drops since September 2017.

“Prices are still increasing, but not at the same rate we saw earlier in the spring,” said Redfin senior economist Taylor Marr. “The record percentage of homes sold above list price is at odds with the higher percentage of price drops in May. This tells us that while it’s still very much a seller’s market, price growth and rising mortgage rates may be pushing buyers to the limit of what they’re able to pay.”

For the seventh month in a row, Redfin reported San Jose topped the nation with price growth of more than 25 percent. The supply of San Jose homes fell by 13.8 percent compared to last year. That drop is actually the smallest decline in a 16-month stretch of inventory declines, an indication of the intensity of San Jose’s inventory shortage. A bit of good news for San Jose buyers: the number of homes newly listed in May ticked up 11.2 percent compared to last year.

The report said after a prolonged period of inventory declines, some metro areas have seen more homes hit the market. Washington, D.C. and Portland, Ore. have now had four months in a row of year-over-year increases in inventory. Seattle inventory increased for the second month in a row, up 17.4 percent in May compared to last year.

Other report findings:
–Denver was the fastest market, with the typical home going under contract in just six days. Seattle and Tacoma, Wash., followed at seven median days on market, followed by Boston and Grand Rapids, Mich., at eight median days.

–The most competitive market in May was San Jose, where 83.8% of homes sold above list price, followed by 79.6% in San Francisco, 76.2% in Oakland, 63.1% in Tacoma and 61.9% in Seattle.

–San Jose had the nation’s highest price growth, rising 27.6% since last year to $1.25 million. Tacoma had the second highest price growth at 19.6% year-over-year, followed by Memphis, Tenn. (16.9%), Las Vegas, (15.9%), and Rochester, N.Y. (15.4%). No metros saw price declines in May.

–Thirteen of 73 metros saw sales surge by double digits from last year. Warren, Mich., led the nation in year-over-year sales growth, up 38.5%, followed by Baltimore, up 31.8%. Camden, N.J. rounded out the top three with sales up 24.7% from a year ago.

–Buffalo, N.Y. saw the largest decline in sales since last year, falling 17.2%. Home sales in Rochester and Baton Rouge, La. declined by 16.6% and 12.8%, respectively.

–Indianapolis had the largest decrease in overall inventory, falling 37.7% from a year ago. Rochester (-37.1%), Buffalo (-32.8%), and Milwaukee (-22.9%) also saw far fewer homes available on the market than a year ago. Portland had the highest increase in the number of homes for sale, up 35.3% year over year, followed by Detroit (28.4%) and Allentown, Pa. (24.4%).