Reports Show Inventories Giving Some Buyers a Chance
A promising spring home buying season is underway, and for some home buyers, particularly those on the West Coast, increasing inventories are helping them get the homes they want.
Redfin, Seattle, reported 56 percent of buyers nationwide who purchased a home in the first quarter closed on the first home they made an offer on, up from 52 percent a year earlier. The report said this is the highest first-offer success rate in three years.
A separate report from RE/MAX, Denver, said March home sales improved by nearly one-third from a year ago, but noted sales remain below average.
Redfin said the biggest year-over-year increases in first-offer success rates were seen in West Coast markets that were “uber-competitive” last year. Nearly two-thirds (63%) of people who purchased a home in the San Jose metro area in the first quarter successfully purchased the first home they made an offer on. A year earlier, only 25 percent of San Jose homebuyers successfully purchased the first home they made an offer on.
More than half (53%) of San Diego homebuyers last quarter closed on the home that was the first one they bid on, up from 38 percent a year earlier. In Seattle, the first-offer success rate increased to 59 percent last quarter, up from 45 percent in the same period last year.
“Last year homebuyers had to pull out all the stops to land a home in competitive West Coast markets, but this year there are more homes for sale and the odds are more in the buyer’s favor,” said Redfin chief economist Daryl Fairweather. “In San Jose, the market has dramatically slowed from a year ago, and it’s actually now easier to get an offer accepted in San Jose than in many other parts of the country.”
Redfin said San Jose now has the second-highest first-offer success rate in the nation, behind Charlotte (70%). Other successful markets include Minneapolis (63.2%), Denver (61.1%) and Baltimore (59.3%).
However, the report also noted not every market is moving in buyers’ favor. In San Antonio, Austin and Phoenix, the first-offer success rate fell from more than 50 percent last year to under 50 percent this year. (Both Austin and Phoenix were top migration destinations in the latest Redfin Migration Report.) Austin and San Antonio saw the largest decreases in the nation, each falling by 12 points.
“As more people continue to move to affordable inland markets, buyers in those areas can expect to encounter more competition in their search for a home,” the report said.
Meanwhile, the RE/MAX National Housing Report said March home sales climbed by nearly 29% from February. But CEO Adam Contos said sales for the 54 markets RE/MAX tracks mark the slowest start in five years, with March sales 8.6% lower than a year ago.
“It was encouraging to see month-over-month sales improve during March,” Contos said. “Although the seasonal bounce that typically ends the first quarter wasn’t as strong as in the past few years, conditions are in place for a healthy spring selling season. Falling interest rates, rising inventory and moderating price increases against the backdrop of a healthy overall economy are cause for optimism for buyers and sellers alike.”
The report said March marked the eighth consecutive month of year-over-year sales declines and the sixth straight month of year-over-year inventory growth, with a 5.3% gain. Housing activity in the report’s markets nationwide also saw the median sales price grow by 3.4% year-over-year, notably smaller than the year-over-year increases in February (5.5%) and January (4.6%). However, the median sales price has risen by more than 3% year-over-year in 17 of the past 18 months.
The report said days on market increased to 59 from 57 last March, while months’ supply of inventory declined year-over-year to 2.7 from 3.0.
