Spring is in the air and with it, the housing market is expected to heat up as buyers compete to get maximum value from a limited inventory of available homes, according to the Redfin Real-time Housing Market Tracker released by online real estate brokers, Redfin, on Thursday.
This monthly analysis indicated that home prices increased 7.8 percent year over year and even though sales were down 7.9 percent annually in January, a low inventory and slightly above average days to sell compared to last year meant that the stage was set for a spring market that was even more competitive than 2017.
In January, the median sale price for a home was $280,500 across the markets serviced by Redfin. The inventory shortage continued through the month with the number of homes available for sale dropping by 14.4 percent, indicating the largest year-over-year decline in 28 consecutive months of falling supply, the report said.
On a month over month basis, the median sale price of homes fell by 2 percent in January, as did the number of homes sold, which showed a dip of 29.4 percent over December 2017
On the upside, the report indicated, listed homes that sold in January found a buyer after 53 days on the market, six days faster than January 2017. Homes sold above list price and the average sales to list price also showed a slight increase over last year by 0.5 percent and 0.1 percent respectively. According to data from the report, 19.2 percent homes sold above list price.
The uncertainty among buyers over the effects of the Tax bill on property prices and taxes was another reason for the slight dip in home sales in the December to January period. “Redfin agents in high-tax states reported that some buyers were hesitant in November and December given the uncertainty around tax reform, which passed in late December. This uncertainty contributed to the drop in January home sales,” said Taylor Marr, Senior Economist at Redfin.
In terms of price rise, Memphis, Tennessee saw the highest price growth across the U.S. with home prices rising 24.6 percent to $162,000. Memphis was followed by San Francisco and San Jose, California; Baton Rouge, Louisiana; and Seattle, Washington. Milwaukee, Wisconsin led the cities that showed a decline in prices with home prices falling 2.7 percent, followed by Camden, New Jersey; Birmingham, Alabama; and Baltimore, Maryland.
To know more about competition, sales, and inventory across metros in January, click here.