Redfin: June Home Prices Rise 3.4% as Supply Flattens
Redfin, Seattle, said June U.S. home-sale prices rose for the third consecutive month, growing by 3.4 percent year over year to a median of $321,200.
The report said June’s price-growth rate was on par with the May rate and was down from a 5.5 percent year-over-year gain in June 2018. The typical home sold in June went under contract in just 35 days, matching last year’s record-fast pace, as falling mortgage rates lured more buyers to the market
Redfin said only six of the 85 largest metro areas Redfin tracks saw a year-over-year decline in their median sale price, the biggest of which was once again in San Jose, where home prices fell by 4.9 percent from a year earlier. Oxnard, Calif. (-4.8%), Oakland (-2.0%), Seattle (-0.5%), Lake County, Ill. (-0.1%) and Los Angeles (-0.1%) also saw price drops.
“As national home price growth stabilizes, we’re continuing to see supply and demand dynamics play out differently in affordable inland markets than in expensive coastal markets,” said Redfin chief economist Daryl Fairweather. “In places like Philadelphia and Cleveland, where home prices are growing by double digits and buyers are rate- and price-sensitive, falling mortgage interest rates make buying a home this summer increasingly attractive.”
But without a commensurate increase in the number of homes for sale, Fairweather noted, some of the most affordable markets are driving nationwide home prices up. Meanwhile, expensive markets like the Bay Area and Seattle are still feeling a chill with falling prices and many more homes for sale than there were a year ago. “Unlike their inland counterparts, buyers in these once-hot West Coast markets are less likely to feel the urgency to buy while rates are low and before prices rise more,” she said. “As long as mortgage rates and inventory are low, we’ll see more buyers competing for homes and driving up prices in places where they are still relatively affordable. And without more homes to buy, particularly at affordable price points, sales will continue to lag.”
The report said home sales fell 8 percent in June compared to a year earlier, a sharp reversal from May, when home sales increased by 2.2 percent from a year ago. The decline was broad, as 80 of the 85 metros tracked by Redfin saw year-over-year home sales fall in June. But Fairweather noted although the 8 percent drop was the fourth largest sales decline in eight years, it was largely because June 2018 had one more weekday–a Friday, which tends to be the most common day for home closings–than June 2019. When adjusted for the number of weekdays, sales were down just 3.5 percent year over year.
Redfin said the supply of homes for sale grew 0.5 percent year over year, the smallest increase in the 10 months inventory has been rising. Inventory levels were mixed across the country, with 48 metros seeing a decline and 37 seeing an increase in the number of homes for sale compared to a year earlier. Metros with the biggest increases in the number of homes for sale were all in California: San Jose (42.8%), Oxnard (26.1%), and Oakland (25.7%). Biggest declines were in New Orleans (-32.0%), Rochester, N.Y. (-27.8%), and Camden, N.J. (-19.6%).
The report also said average sale-to-list price ratio of homes sold hit a record high in June at 98.8 percent nationally. While the national sale-to-list price ratio masks regional variation, as the ratio approaches or exceeds 100%, it generally indicates that buyers have less leverage, or have had less success, negotiating prices down.
The report can be found at https://www.redfin.com/blog/june-2019-housing-market-tracker.
