As listings fell, sales plunged and prices soared in December.
Home Sales Down -11% y/y in December
US home sales took their biggest dive since the country went into its first COVID lockdowns, according to Redfin. Sales transactions dropped -11% y/y, the biggest yearly decline since June 2020.
Why? Active listings plummeted -19% y/y to an all-time low.
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Demand continued to somehow sustain itself despite potential buyers having little to buy. That demand expressed itself in both price jumps and bidding wars.
Up +15% y/y, the median price of a single-family house hit $382,900 in December while bidding wars for the few properties available to buy drove prices even higher. With mortgage rates beginning to increase in December in the midst of rising prices and fewer for-sale homes than ever from which to choose, first-time buyers were squeezed even more than they have been.
Meanwhile, homeowners are sitting on a larger mountain of home equity due to price increases and are using that equity to “trade up” to larger, more expensive homes.
Daryl Fairweather, Redfin’s Chief Economist, said, “There are plenty of homebuyers on the hunt, but there is just nothing for sale. In many markets, shopping for a home feels like going to the grocery store only to find the shelves bare.”
Fairweather added, “I expect to see more buyers and sellers in the market, but demand will increase more than supply – pushing prices higher at the start of the year.”
Redfin Market Summary
12/21 Month/Month Year/Year
Median Sale Price $382,900 -0.1% +15.2%
Homes Sold 579,300 -3.6% -10.7%
Pending Sales 593,800 -2.2% -3.1%
New Listings 629,900 -2.4% -13.4%
All Homes For Sale 1,334,600 -3.2% -18.9%
Median DOM 24 +2 -7
Months of Supply 1 -0.3% -0.3%
Sold Above List 42.8% -1.5%% +9.2%
Ave. Sale-to-List 100.5% -0.1% +1.1%
Ave.30-yr. Fixed 3.10% +0.003% +0.42%
Metros with Largest Price Increases
- Austin TX +30% y/y
- North Point FL – +28% y/y
- Phoenix AZ – +28%
The only one of 88 largest metros tracked by Redfin that saw median sale prices decrease from one year ago was Bridgeport CT. After seeing home prices increase +28% y/y in December 2020, Bridgeport home prices fell -0.4% in December 2021.
Metros with Largest Annual Sales Drops and Gains
The month-to-month sales volume drop in December from November was -3.6%. The annual decline in sales was -11% from December 2020. Annual sales dropped in 79 of the 88 largest metros tracked by Redfin. Metros with the biggest annual sales drops included:
- Nassau County NY – -22% y/y
- New Brunswick NJ – -22% y/y
- Albany NY – -21% y/y
Metros with the biggest annual sales increases included:
- Greenville SC – +9% y/y
- Greensboro NC -+8% y/y
- Baton Rouge LA – +7% y/y
Metros with Largest Annual Inventory Gains and Losses
Only Detroit saw an annual inventory increase. That increase was +3.9% y/y.
Metros with the largest annual declines in overall active listings included:
- Baton Rouge LA – -52% y/y
- San Jose CA – -48.7% y/y
- San Francisco CA – -46.1% y/y
- Salt Lake City UT – -46.1% y/y
Redfin Estimate Data
Redfin, via its Redfin Estimate data, predicted the metros where the largest share of homes would sell below list price. Those metros included:
- Miami FL – 84.6% homes sold below list in December 2021
- West Palm Beach FL – 79.7%
- Fort Lauderdale FL – 79.2%
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Redfin also predicted the metros where the largest share of homes would sell above list price. Those metros included:
- Oakland CA – 91.9% homes sold above list in December 2021
- San Jose CA – 90.8%
- San Francisco CA – 87.0%
Thanks to Redfin and Bloomberg.