West Coast Markets See Turning Signs

Redfin, Seattle, said in many West Coast metros, housing inventories have increased “dramatically” from a year ago, signaling a turning point in those housing markets.

The Redfin analysis said San Jose, Calif. experienced the largest year-over-year supply increase across 170 U.S. metros for the four-week period ending September 30. Homes for sale there jumped by 86.7 percent from a year earlier when just over 1,200 homes were on the market. Five other West Coast metro areas topped the list of biggest increases in the number of homes on the market: Seattle (53.9%), Oakland (28.9%), Portland (27.5%), San Diego (26.8%) and San Francisco (22.5%).

By contrast, inventory was virtually flat nationwide.

Just a year earlier, Redfin said, inventory in all of these markets was rapidly declining, with double-digit year-over-year decreases in every market but Portland, where the number of homes for sale fell by just 4.7 percent.

“Big gains in the number of homes for sale would seem to be a sign that more people are finally listing their homes, which is what homebuyers have long been hoping for,” said Redfin market analyst Tim Ellis. “But that’s not exactly what’s happening in most of these markets. Instead, the biggest reason for the buildup of inventory in these markets is that fewer homes are being sold.”

The report noted a year ago, more homes sole each month than there were homes listed for sale, which caused the number of homes on the market to dip dramatically. This year fewer homes are selling, so sales are no longer outnumbering new listings every month. “This is allowing inventory to finally begin to build again in several markets, which is good for home buyers and should lead to a more balanced market,” Ellis said.

Redfin added despite these shifts, the housing market today still favors home sellers, but these changes are encouraging for buyers who have been frustrated by the lack of selection and bidding wars. “More balanced market means more choices for buyers and more time to make decisions,” Ellis said.