Late-Summer Home Activity ‘Unseasonably Hot;’ Luxury Home Prices Bounce Back

Redfin, Seattle, said median home prices for the four-week period ending Aug. 9 jumped by 10 percent from a year ago to a record-high $314,000 as the spring home-buying season extended well into late summer.

Redfin also reported the median sale price for luxury homes in the U.S. rose 1.2% year over year to $825,000 during the three months ending July 31. The rebound comes after a record decline in the spring, when luxury prices dropped 1.7% as the coronavirus pandemic forced the U.S. economy into a standstill.

Redfin said thanks to “seemingly insatiable” homebuyer demand, the typical seasonal patterns of the housing market have been short-circuited this year. Home prices typically decline this time of year after hitting a seasonal peak in late June or early July. This year, in the four weeks ending August 9, prices rose by 3.5% month over month. Last year, home prices fell 1.7% over that same period.

“With the coronavirus and the presidential election, things have been anything but typical this year,” said Spokane, Wash., Redfin agent Brynn Rea. “I don’t feel it slowing down at all right now like it usually does when people are typically spending more of their time on vacations and getting ready to go back to school.”

Redfin said of homes that went under contract during the four weeks ending August 9, 46% found a buyer within two weeks of hitting the market—a slight uptick from the four-week period ending August 2 and the highest level Redfin has seen since at least 2012. During the same period last year, 33% of homes found a buyer within two weeks.

The report said the share of homes that found a buyer in two weeks or less increased by 2.0 percentage points from the previous. Last year the share declined 3.0 percentage points. Redfin said one reason that the share of homes selling quickly is staying high when it typically declines is a surge in demand for some home types and locations that were largely considered undesirable pre-COVID.

“There’s not an area that isn’t hot right now because of a lack of homes for sale,” said New Jersey Redfin listing agent Darlene Schror. “Buyers today have a whole new set of preferences, such as being far away from neighbors and having space for a proper office, on top of all the usual criteria like highly rated schools. The houses that surprise me the most are the ones out in the boondocks, so far from the cities. You’ve got to drive to everything; there’s nothing to walk to. Before the pandemic, nobody wanted that stuff. Homes listed in those areas would sit on the market for a long time. Now they are hot.”

The report also noted average sale-to-list price ratio increased to a record-high 99.1%, up from 98.4% last year. Month-over-month this measure has increased 0.3 percentage points. Typically during this time of year the sale-to-list ratio also declines—it fell 0.1 percentage points in 2019 and 0.2 percentage points in 2018.

Active inventory of homes for sale was down 28%, while the number of new listings was basically flat year over year for the four-week period ending August 9 (-0.5%).

“Right now you have a set of people who are highly motivated to buy—they have the money and they have the desire, and they aren’t afraid of competition,” said Redfin chief economist Daryl Fairweather. “But there is an even bigger set of homeowners who are very comfortable where they are and don’t want to rock the boat. Some simply don’t want to deal with the hassle of moving during a pandemic and facing competition when they buy. Others may be struggling financially, but they are protected right now by mortgage forbearance, so they want to hold onto the equity in their homes in case the government doesn’t come through with additional assistance. That imbalance between people who want to buy and people who want to sell is driving up prices.”

The report can be accessed at

In a separate report, Redfin said the median sale price for luxury homes in the U.S. rose 1.2% year over year to $825,000 during the three months ending July 31. This followed a record decline in the spring, when luxury prices dropped 1.7%.

“This pandemic-induced recession is unlike any past recession, and its effect on luxury housing is similarly incomparable,” Fairweather said. “Now more than ever, homebuyers are seeking out features long associated with luxury homes, like spacious yards, home offices, gyms and private swimming pools. And that shift in buyer preferences means the luxury housing market isn’t suffering like it has in past recessions, when homebuyers mercilessly cut their budgets.”

Redfin noted while luxury prices have started to make a comeback, growth in this segment still lags growth in the non-luxury market, where the median sale price climbed 6.3% year over year to $257,250 during the three months ending July 31. This is because the non-luxury market faces a much deeper shortage of homes for sale, which has pushed up prices, Fairweather said. She added the luxury market could strengthen further in the third quarter, given recent gains in the stock market, where high-end homebuyers tend to hold much of their wealth.