Home Prices Up 3% in Redfin Real-Time Home Price Tracker; Buyers Frustrated with Lack of Inventory
Housing Market Struggling for a Recovery; Hampered by 28% Drop in Inventory
SEATTLE, Aug. 9, 2012 /PRNewswire/ -- Technology-powered real estate broker Redfin (www.redfin.com) today released its Real-Time Home Price Tracker for July 2012, showing an annual price gain of 3 percent across 19 major U.S. markets. Prices were flat from last month. Inventory levels continued to decline, with a 28.1 percent drop in homes for sale (inventory) since the same time last year. Home sales increased 6.8 percent over last year, but fell 12.4 percent since June, a typical decline for this time of year.
This is the first published analysis of home prices, sales volumes and inventory levels solely for the month of July 2012. It is also the only report of its kind to combine real estate brokerage listing data with public record data, ensuring accuracy and accounting for homes not sold by a real estate agent.
"Last month, we noted that the market was strong in June but could falter in July as sellers began to test demand at higher asking prices," said Redfin CEO Glenn Kelman. "Now the market has flattened, and will likely sag in the months to come. Phoenix has been the bellwether for the recovery but shows signs of over-heating. Bidding wars in major cities are still very common, but usually involve three or four buyers instead of ten or twelve. Early-stage demand over the past three weeks has been up and down, and we don't know yet if it will pick up again in September and October. But whereas seasonal declines in the back half of past years completely reversed spring-time gains, we expect 2012 prices will end the year above 2011 levels, mostly because inventory is so low: the market won't be flooded any time soon with bank-listed foreclosures, nor will we see many conventional listings until next spring. Sales will be up and down depending on how many homes there are to buy."
Prices Up 3.2% Year Over Year; Phoenix and San Jose Had Strongest Gains
In the 19 markets Redfin serves, 16 showed annual price increases. Prices increased the most in Phoenix at 28.7 percent and in San Jose at 11.9 percent. In Long Island, NY prices fell the most, at 6.6 percent.
Inventory Down 28.1% Year Over Year Nationwide, Down 50% or More in California's Major Cities
The primary reason prices are increasing is falling inventory. Additionally, there are fewer bank-owned listings for sale, and fewer conventional sales on the market. In all of the markets measured, the number of houses for sale declined since July 2011; in 16 of 18, the decline was by 20 percent or more. (Yearly inventory data is not yet available for Philadelphia.)
"Because inventory is so low, when clients find a house they love, they will do almost anything to get it," said Brad Le, a Redfin Agent in Silicon Valley. "Buyers are offering all-cash and no contingencies, one to three months of free lease-backs in case the homeowners want to stay in the home after closing, and even escalation clauses."
Sales Volume Up 6.8% Over Last Year, But Down 12.4% Since June
Low inventory continues to hold back any large sales gains. Closed sales posted a 6.8 percent gain since last year, with 14 markets increasing between July 2011 and July 2012. Month to month, sales declined 12.4 percent, with all 19 markets taking the seasonal hit.
One in Four Listings Is Under Contract in Less than 14 Days
Although price gains may have slowed, the percentage of new listings that went under contract in 14 days or less remains high. More than a quarter (27.8 percent) of all single-family houses that debuted in the first 3.5 weeks of July were off the market in less than two weeks. Rapid sales are still most common in California, where inventory is falling fastest.
About the Real-Time Home Price Tracker
Redfin's monthly report on home prices, inventory levels and sales volumes is an up-to-date, accurate portrait of the U.S. real estate market, coming weeks or months ahead of other market reports. As a broker with access to dozens of Multiple Listing Services (MLSs) used by real estate agents to list properties and record sales, Redfin gets data within minutes of a sale, pending sale or listing activation, well before any government, media or analytics organization. Using MLS fields, Redfin is able to distinguish houses from condominiums and townhouses, which often sell for less money. To validate the accuracy of the data and to account for sales not handled by a real estate agent, Redfin compares MLS data with county records as they become available, using sophisticated algorithms to identify and resolve disparities about square footage or price for each address. Data at the local and neighborhood level are available in a spreadsheet, and the report methodology is available as an Adobe document.
Redfin (www.redfin.com) is a technology-powered real estate broker that represents people buying and selling homes. Founded and run by technologists, Redfin has a team of experienced, full-service real estate agents who are advocates, not sales-people, earning customer-satisfaction bonuses, not commissions. Redfin's online tools feature all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. The company serves 19 U.S. markets, and has closed more than $5 billion in home sales. Follow us on blog.redfin.com or our Twitter feed @redfin.
SOURCE Redfin Corporation
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