Homes Selling Faster Than Ever; Prices Up 7.6%

The typical home that sold in April went under contract in just 36 days, said Redfin, Seattle, even as the national median home sale price surpassed $300,000 for the first time. A separate report from RE/MAX, Denver, confirmed these trends.

Redfin reported the national median home sale price increased 7.6 percent in April from a year ago. The median home sale price was $302,200 across the 174 markets Redfin tracks. While April posted solid growth in home sales, up 5.2 percent from last year, home sales from January through April were just 1.5 percent higher than the same period last year.

Meanwhile, RE/MAX reported home sales increased 2.3% year-over-year in April in the face of record-low inventory and the second-highest median sales price in the nine-year history of its National Housing Report.

The report (https://rem.ax/2phKHWT) said the $243,000 median sales price was a record for April and was second only in report history to $245,000 in June 2017. Thirty-eight of the 53 markets in the report posted more sales from a year ago, while the 2.5 months’ supply of inventory tied March as the lowest in the history of the report. The average days on market in April was 52, five days less than a year ago and the lowest on record for April.

“If 2018 is like recent years, we’re only two months away from home prices peaking–we’re already seeing some impressive prices moving up in markets throughout the U.S.,” said RE/MAX CEO Adam Contos. “As we head into summer, we’ll watch several housing markers like home starts, mortgage applications and sales price to gauge the effect they’ll have on inventory across the country–the good news is that the rate of sales helps accommodate a shrinking inventory and buyers can still find opportunities.”

Redfin said the number of homes newly listed for sale in April rose 5.7 percent, a “welcome sign for buyers after a lackluster number of new listings went on the market in the first three months of 2018,” said Chief Economist Nela Richardson. However, the new listings were not sufficient to overcome the inventory shortage: the supply of homes for sale declined 9.2 percent year over year in April. The report said competition escalated as buyers vied for a limited number of properties–just 2.8 months of supply remained at the end of the month compared to the six months that generally signals a balanced market.

The report said the typical home that sold last month went under contract in 36 days, six days faster than a year earlier and faster than any month Redfin has recorded going back to 2010. Among homes that sold last month, 26.2 percent sold above their list price, up from 24.9 percent last April. The average sale-to-list price ratio was 98.8 percent, also the highest on record.

“Despite rising prices and low inventory, sales in 2018 so far are slightly higher than last year, which was the best year on record since the 2006 housing boom,” Richardson said. “As we enter peak home buying season, new listings will be key in maintaining sales growth and moderating the rapid price increases we’ve seen this year.”

The report said for the sixth month in a row, San Jose topped the nation with price growth over 25 percent. The supply of San Jose homes fell 30.1 percent year over year.

Other report highlights:
–Denver was the fastest market, with half of all homes pending sale in just six days, the same pace a year ago. Seattle was the next fastest market with seven median days on market, followed by San Jose, Grand Rapids, Mich., and Tacoma, Wash., at nine days.

–The most competitive market in April was San Jose, where 84.6% of homes sold above list price, followed by 78.6% in San Francisco, 74.6% in Oakland, 64.0% in Seattle and 50.8% in Tacoma.

–San Jose also saw the nation’s highest price growth, rising 26.2% since last year to $1.210 million. Detroit had the second highest growth at 21.2%, followed by Las Vegas (17%), Seattle (14.7%) and Tacoma (13.4%).

–No metros that have a population of at least 750,000 had price declines in April.

–Twelve of 73 metros saw sales surge by double digits from last year. Louisville, Ky., led the nation in year-over-year sales growth, up 20.5%, followed by Grand Rapids, up 18.3% and Detroit (15.5%). Allentown, Pa., saw the largest decline in sales since last year, falling 15.7%. Home sales in Long Island, N.Y. and Rochester, N.Y. declined by 14.0% and 12.8%, respectively.

–Indianapolis saw the largest decrease in overall inventory, falling 42.1% since last April. Rochester (-41.1%), Buffalo, N.Y. (-37.5%) and San Jose (-30.1%) also saw far fewer homes available on the market than a year ago. Baton Rouge, La., had the highest increase in the number of homes for sale, up 24.6% year over year, followed by Portland, Ore. (22.7%) and Allentown (20.7%).