Redfin: February Home Prices Post Smallest YOY Gain Since 2012

Redfin, Seattle, said home prices appreciated by just 0.6 percent annually in February, the smallest year over year gain since 2012.

The report said home prices fell in 10 of the 85 largest metro areas Redfin tracks, with the largest year-over-year declines in Bridgeport, Conn. (-15.2%), San Jose (-11.3%) and San Francisco (-7.9%). Metros that saw biggest increases in home prices from last year were led by Newark (12.2%), Milwaukee (11.8%) and Buffalo, N.Y. (11.7%).

Earlier this week, Zillow Inc., Seattle, reported cooling in West Coast markets as well, with San Jose, San Francisco, San Diego, Los Angeles and Denver seeing sharp declines in home prices.

Redfin reported the median home price rose by 1% month over month to $287,400 in February, the smallest increase recorded since prices stopped falling year-over-year in March 2012.

“When home prices are going up quickly, buyers feel like they are forced to move fast and purchase a home before prices rise even more,” said Redfin chief economist Daryl Fairweather. “Now that home prices are growing slower than inflation, there really isn’t much downside to taking your time. And now that mortgage rates are no longer going up every week, buyers in many markets have the luxury of knowing that whether they buy now or later they will pay about the same for a home.”

The report said the number of homes for sale at the end of February rose by 2.9 percent from a year earlier. The number of homes newly listed for sale fell from a year ago (-4.8%).

Redfin said home-selling speeds, which reached a record-fast median pace of 35 days on market last May, slowed year-over-year again in February. The typical home that sold in February went under contract in a median of 59 days, two days longer than a year earlier.

“Because homes are sitting on the market longer and the market is less competitive than last year, first-time homebuyers now have a better chance of winning a home,” Fairweather said. “That could mean more potential buyers in the spring. Home sales are already rebounding this month, and that trend may continue now that the market is more balanced.”

The report said Oakland, San Francisco and Denver reclaimed their positions as the fastest housing markets in February, when the typical home that sold went under contract in 18, 22 and 27 days, respectively. Grand Rapids, Mich. (28) and Tacoma, Wash. (30) were the next fastest markets.