Home Reports: Prices Up, Inventories Down
Home sales, which lagged during the first part of 2019, continued their recent rebound with another strong month in October, said RE/MAX, Denver.
A separate report from Redfin, Seattle, said home sale prices increased 5.4% year over year in October to a median of $313,200, the largest since July 2018, although it cautioned current strength may be “overstated,” given the weakening housing market a year ago.
RE/MAX said home sales finished 3.9% higher from a year ago. At the same time, inventory posted a steep 9.0% year-over-year decline across the report’s 54 metro areas, while the median sales price of $254,800 set an October record.
“October continued a recent win streak for home sales, and the market is positioned much better than it was a year ago,” said RE/MAX Holdings CEO Adam Contos. “Demand is strong, due in part to low interest rates, but buyers have limited options because inventory remains such a challenge. As a result, prices keep rising. Fortunately, key forecasts suggest an increase in new homes moving onto the market next year, which would help address the inventory situation and potentially slow the steady price gains we’ve seen for so long.”
RE/MAX noted with May, July and September already in the positive column, October became the fourth month of the past six to post a year-over-year increase in sales, which hadn’t happened for nine months prior to May.
Meanwhile, inventory resumed the skid that has dominated the last decade. October’s year-over-year decline of 9.0% was the largest for any month since May 2018. The downturn resulted in October’s months of inventory dropping to 3.1–the lowest October amount in the report’s 11-year history. The 49 days on market was the second-lowest figure for October in report history, trailing only 2018’s 48.
The median sales price of $254,800 set an October record for the report and the 8.4% increase year over year was the highest for the month since 2013.
Meanwhile, Redfin reported home-sale prices increased by 5.4% year over year in October to a median of $313,200 the largest since July 2018.
“Low mortgage rates are propping up homebuyer demand and juicing prices,” said Redfin chief economist Daryl Fairweather. “However, home sales have been slow to grow since there are so few homes for sale and not many new listings hitting the market, especially affordable ones. The market is split: It’s a seller’s market for moderately priced homes, but a buyer’s market for pricier homes.”
Redfin reported gains in the nationwide median home price continue to be driven by the affordable metro areas. For the fourth month in a row, the 10 metro areas with the biggest gains all had median sale prices below the national median, led in October by Camden, N.J. (median price $197,000, up 13.9%), Jacksonville, Fla. ($243,179, +13.1%) and Greensboro, N.C. ($178,500, +10.5%).
In the Washington D.C. metro area, where Amazon announced its HQ2 expansion a year ago, the median home price rose by 5.1% from a year ago to $410,000–a larger year-over-year increase than San Francisco, Seattle, Los Angeles, Boston, New York and most other expensive metro areas across the nation. Just one of the 85 largest metro areas Redfin tracks saw a year-over-year decline in the median sale price: San Jose, where home prices fell 7.2%. In San Jose, prices were still rising 9.9% a year ago, and home prices didn’t begin to significantly soften until December.
Redfin reported the typical home sold in October went under contract in 44 days, the same as a year ago. Similarly, the share of homes sold above list price basically flattened out year over year, coming in at 21.3% in October compared to 21.5% a year earlier.
The report can be accessed at https://www.redfin.com/blog/housing-market-news-october-2019.