Redfin, the tech brokerage, tells us that home sales prices in March 2018 were up +8.9% over March 2017. A startlingly 23.9% of all homes sold in March 2018 were sold above listing prices.
Inventory, or rather lack of it, is seen as the major cause of this price spurt. Year over year, the number of homes for sale dropped -11.9%. The number of newly listed homes dropped -5.6% year over year. Both of these data points led to an overall -3.9% in sales volume compared to March 2017.
Nela Richardson, Redfin’s chief economist, said, “Sellers are slow to list this year and we aren’t seeing enough newly constructed homes to fill the gap. If we don’t see the number of new listings turn around next month or a pick-up in new housing starts, inventory will be a persistent drag on sales for the remainder of this year.”
Comparing March 2018 to March 2017, inventory dropped in 66 of the 73 metro areas that Redfin tracks. In 48 of those metro areas, inventory declines were more than 10%.
In addition to sales price increases in this high consumer demand housing market, low inventory numbers led to competitive and quick closings. Redfin’s homes averaged 43 days on the market in March 2018, 8 days less on the market than in March 2016. This March 2018 homes sold faster than any March since Redfin began tracking this days on the market information.
In the fastest-track markets, Denver and Seattle for example, 20% of the homes sold came under contract within two weeks. Within this percentile, some homes sold in just one week.
On a brighter side inventory-wise, there are inventory increases in isolated areas such as
Baton Rouge, LA – +26.6%
Washington DC – +11.8%
Allentown, PA – +11.4%