Existing-Home Sales to Grow 3.7 Percent in 2018, but Inventory Shortages and Tax Reform Effects Loom

Chicago, IL – November 3rd, 2017 (PRNewswire) The steadily improving U.S economy, sustained job growth, and rising confidence that now is a good time to buy a home should pave the way for an increase in existing-home sales in 2018, but continued supply shortages, and passage of a tax bill that disincentives homeownership, threaten to handcuff what should be stronger activity. That is according to a residential housing and economic forecast session here at the 2017 REALTORS® Conference & Expo.

NAR logo

Lawrence Yun, chief economist at the National Association of Realtors®, presented his 2018 housing and economic forecast and was joined onstage by Ken Rosen, chairman of Rosen Consulting Group and UC Berkeley’s Fisher Center for Real Estate and Urban Economics. Rosen addressed the primary causes for the depressed U.S. homeownership rate and shared his proposed ideas, highlighted in a white paper released earlier today, on how to ensure more creditworthy households can enjoy the personal and financial benefits of owning a home.

“Despite considerable demand all year, pending sales have lost a step in recent months because low supply is pushing prices higher and making homebuying less affordable in several parts of the country,” said Yun.

With a few months of data remaining in 2017, Yun estimates that existing-home sales will finish at a pace of 5.47 million – the best since 2006 (6.47 million), but only a modest improvement (0.4 percent) from 2016 (5.45 million). In 2018, sales are forecast to expand 3.7 percent to 5.67 million. The national median existing-home price is expected to rise to around 5.5 percent this year and next year.

Yun and Rosen, however, both cautioned that the House Ways and Means Committee’s release yesterday of its legislative proposal to overhaul the American tax code could very well affect home sales and prices next year and beyond. The tax bill in its current form is a direct tax hike on homeowners and nullifies the homeownership incentive for all but the top 5 percent of tax filers. Earlier this year, NAR released a full analysis of the House Republican blueprint for reform, finding that it could negatively affect home values by about 10 percent and raise taxes on middle-class homeowners by an average of $815.

Much of Yun and Rosen’s presentation focused on the reasons why many would-be buyers are not reaching the market. NAR’s 2017 Profile of Home Buyers and Sellers, released earlier this week, revealed that first-time buyers were only 34 percent of sales over the past year, which was the fourth lowest since the survey began 36 years ago.

Rosen, presenting findings from Rosen Consulting Group’s three white papers released this year on the depressed homeownership rate, said a perverse mix of affordability challenges, student loan debt, tight credit conditions and housing supply shortages continue to hamper many households from owning a home. This is despite extremely low mortgage rates that should be fostering the biggest for-sale housing boom in American history.

“Ownership rates are currently below their peak across the younger age groups and in cities that have seen sharp price increases, and it’s not a good thing,” said Rosen, “A higher rate of homeownership makes sense. It is so important to the financial health of the economy. Homeownership helps households accumulate wealth over time, reduces inequality, increases investments in communities and boosts economic growth.”

According to Yun, the biggest impediment to sales right now and into next year is the massive shortage of supply in relation to overall demand. The lagging pace of new home construction in recent years is further creating a logjam in housing turnover. Without enough new homes on the market, homeowners are typically staying put for a longer period of time before selling, typically 10 years, which is keeping inventory low and hurting affordability.

“The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent,” said Yun. “Despite improving confidence this year from renters that now is a good time to buy a home, the inability for them to do so is causing them to miss out on the significant wealth gains that homeowners have benefitted from through rising home values.”

Pointing to Los Angeles and the Bay Area as examples of areas with significant affordability constraints, Yun said unhealthy levels of price appreciation are also occurring in many other markets with strong job growth, but without the commensurate rise in housing starts. As a result, the ability to buy a home has become extremely difficult for even those with well-paying jobs and is forcing households to flee expensive areas in the West and Mountain regions for more affordable parts of the country. This in turn could affect future job growth in these areas and ultimately soften housing demand.

Although Yun forecasts single-family housing starts to jump 9.4 percent to 950,000 next year, this is still below the 50-year average of around 1.2 million starts. New single-family home sales are likely to total 606,000 this year and rise to around 690,000 in 2018.

Rosen agreed with Yun’s remarks that a significant boost in residential construction is needed to improve affordability and increase sales. He explained that the white paper released today, “Rebuilding the American Dream: Strategies to Sustainably Increase Homeownership,” identifies 25 ideas to bolster homeownership. They include: overriding restrictive zoning laws, promoting modular construction [to increase supply], a down payment savings program, tackling the burden of student debt, and a nationwide counseling program for homeowners who previously experienced foreclosure and may be hesitant to consider buying a home again, among others.

“A willingness to embrace new ideas will go a long way towards easing the constraints of low supply, student debt and weaker affordability that are currently suppressing homeownership,” said Rosen.

After two consecutive quarters of economic growth of 3 percent, Yun expects GDP to come in around 2.2 percent for the year and to expand to 2.7 percent overall in 2018, as long as job growth remains solid and residential construction picks up.

With the Federal Reserve unwinding its balance sheet and continuing its plan to slowly raise short-term rates, Yun believes mortgage rates will gradually climb towards 4.50 percent by the end of 2018.

“An overwhelming majority of renters want to own a home in the future and believe it is part of their American Dream,” said Yun. “Assuming there are no changes to the tax code that hurt homeownership, the gradually expanding economy and continued job creation should set the stage for a more meaningful increase in home sales in 2018.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.nar.realtor. This and other news releases are posted in the newsroom in the “About NAR” tab.

Metro Home Prices Maintain Fast Growth in Third Quarter; Rise 5.3 Percent

Chicago, IL – November 2, 2017 (nar.realtor) Severely lacking inventory levels across the country pinched sales growth and kept home prices rising at a steady clip in nearly all metro areas in the third quarter, according to the latest quarterly report by the National Association of Realtors®.

NAR logo

The national median existing single–family home price in the third quarter was $254,000, which is up 5.3 percent from the third quarter of 2016 ($241,300). The median price during the second quarter increased 6.1 percent from the second quarter of 2016.

Single–family home prices last quarter increased in 92 percent of measured markets, with 162 out of 177 metropolitan statistical areas(1) (MSAs) showing sales price gains in the third quarter compared with the third quarter of 2016 (the most since the second quarter of 2015, at 93 percent). Fifteen areas (8 percent) recorded lower median prices from a year earlier.

Lawrence Yun

Lawrence Yun

Lawrence Yun, NAR chief economist, says the housing market’s performance during the third quarter was underwhelming. “The stock market’s climb to new record highs, the continued stretch of outstanding job growth and mortgage rates under 4 percent kept homebuyer demand at a very robust level throughout the summer,” he said. “Unfortunately, the pace of new listings were unable to replace what was quickly sold. Home shoppers had little to choose from, and many had out outbid others in order to close on a home. The end result was a slowdown in sales from earlier in the year, steadfast price growth and weakening affordability conditions.”

Added Yun, “While there was some moderation in price appreciation last quarter, home prices still far exceed incomes in several parts of the country – especially in the largest markets in the South and West where new home construction simply is not keeping up with job growth.”

Nineteen metro areas in the third quarter (11 percent) experienced double–digit increases, down from 23 areas in the second quarter (13 percent). Overall, there were more rising markets in the third quarter compared to the second quarter, when price gains were recorded in 87 percent of metro areas.

Total existing–home sales(2), including single family and condos, slipped 3.1 percent to a seasonally adjusted annual rate of 5.39 million in the third quarter from 5.56 million in the second quarter, but are still 0.2 percent higher than the 5.38 million pace during the third quarter of 2016.

At the end of the third quarter, there were 1.90 million existing homes available for sale(3), which was 6.4 percent below the 2.03 million homes for sale at the end of the third quarter in 2016. The average supply during the second quarter was 4.2 months – down from 4.6 months in the third quarter of last year.

Last quarter, the uptick in the national family median income ($71,775)(4) did little to stave off continued weakness in affordability from the combination of higher mortgage rates and home prices compared to a year ago. To purchase a single–family home at the national median price, a buyer making a 5 percent down payment would need an income of $55,142, a 10 percent down payment would require an income of $52,240, and $46,435 would be needed for a 20 percent down payment.

“Affordability pressures are frustratingly occurring in places where jobs are plentiful and incomes are rising,” added Yun. “Without a significant boost in new and existing inventory to alleviate price growth, job creation could slow in high cost areas in upcoming years if residents begin exiling to more affordable parts of the country.”

The five most expensive housing markets in the third quarter were the San Jose, California metro area, where the median existing single–family price was $1,165,000; San Francisco, $900,000; Anaheim–Santa Ana, California, $790,000; urban Honolulu, $760,200; and San Diego, $607,000.

The five lowest–cost metro areas in the third quarter were Decatur, Illinois, $86,300; Youngstown–Warren–Boardman, Ohio, $88,900; Cumberland, Maryland, $96,400; Wichita Falls, Texas, $113,800; and Elmira, New York, $117,300.

Metro area condominium and cooperative prices – covering changes in 61 metro areas – showed the national median existing–condo price was $237,200 in the third quarter, up 5.4 percent from the third quarter of 2016 ($225,100). Ninety–three percent of metro areas showed gains in their median condo price from a year ago.

Regional Breakdown

Total existing–home sales in the Northeast dropped 7.9 percent in the third quarter and are 0.5 percent below the third quarter of 2016. The median existing single–family home price in the Northeast was $283,800 in the third quarter, up 4.1 percent from a year ago.

In the Midwest, existing–home sales declined 3.3 percent in the third quarter and are 0.8 percent below a year ago. The median existing single–family home price in the Midwest increased 5.6 percent to $202,400 in the third quarter from the same quarter a year ago.

Existing–home sales in the South fell 4.4 percent in the third quarter but are 0.2 percent higher than the third quarter of 2016. The median existing single–family home price in the South was $226,100 in the third quarter, 5.5 percent above a year earlier.

In the West, existing–home sales increased 2.8 percent in the third quarter and are 1.9 percent above a year ago. The median existing single–family home price in the West increased 7.0 percent to $373,700 in the third quarter from the third quarter of 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: NAR releases quarterly median single–family price data for approximately 175 Metropolitan Statistical Areas (MSAs). In some cases the MSA prices may not coincide with data released by state and local Realtor® associations. Any discrepancy may be due to differences in geographic coverage, product mix, and timing. In the event of discrepancies, Realtors® are advised that for business purposes, local data from their association may be more relevant.

Data tables for MSA home prices (single family and condo) are posted at https://www.nar.realtor/research-and-statistics/housing-statistics/metro. If insufficient data is reported for a MSA in particular quarter, it is listed as N/A. For areas not covered in the tables, please contact the local association of Realtors®.

1. Areas are generally metropolitan statistical areas as defined by the U.S. Office of Management and Budget. NAR adheres to the OMB definitions, although in some areas an exact match is not possible from the available data. A list of counties included in MSA definitions is available at:
http://www.census.gov/population/estimates/metro-city/List4.txt (link is external).

Regional median home prices are from a separate sampling that includes rural areas and portions of some smaller metros that are not included in this report; the regional percentage changes do not necessarily parallel changes in the larger metro areas. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Quarter–to–quarter comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns.

Median price measurement reflects the types of homes that are selling during the quarter and can be skewed at times by changes in the sales mix. For example, changes in the level of distressed sales, which are heavily discounted, can vary notably in given markets and may affect percentage comparisons. Annual price measures generally smooth out any quarterly swings.

NAR began tracking of metropolitan area median single–family home prices in 1979; the metro area condo price series dates back to 1989.

Because there is a concentration of condos in high–cost metro areas, the national median condo price often is higher than the median single–family price. In a given market area, condos typically cost less than single–family homes. As the reporting sample expands in the future, additional areas will be included in the condo price report.

2. The seasonally adjusted annual rate for a particular quarter represents what the total number of actual sales for a year would be if the relative sales pace for that quarter was maintained for four consecutive quarters. Total home sales include single family, townhomes, condominiums and co–operative housing.

3. Total inventory and month’s supply data are available back through 1999, while single–family inventory and month’s supply are available back to 1982 (prior to 1999, single–family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

Seasonally adjusted rates are used in reporting quarterly data to factor out seasonal variations in resale activity. For example, sales volume normally is higher in the summer and relatively light in winter, primarily because of differences in the weather and household buying patterns.

4. Income figures are rounded to the nearest hundred, based on NAR modeling of Census data. Qualifying income requirements are determined using several scenarios on downpayment percentages and assume 25 percent of gross income devoted to mortgage principal and interest at a mortgage interest rate of 3.9%.

NOTE: Existing–Home Sales for October will be released November 21, and the Pending Home Sales Index for October will be released November 29; release times are 10:00 a.m. ET.

October Existing Home Sales Decrease Slightly According To Latest Ten-X Residential Real Estate Nowcast

Ten-X Residential Nowcast Model also projects another year-over-year increase in median sales price

IRVINE and SILICON VALLEY, Calif., Oct. 26, 2017 (PRNewswire) Ten-X, the nation’s leading online real estate transaction marketplace, has released its latest Ten-X Residential Real Estate Nowcast which indicates existing home sales will decrease slightly in October. According to the nowcast, October sales will hit a seasonally adjusted annual rate (SAAR) between 5.2 and 5.49 million with a targeted number of 5.35 million, down 0.8 percent from NAR’s reported September sales.

Ten-X Logo

“The lack of available inventory is having a major impact on existing home sales, and there’s not much hope for improvement in the foreseeable future,” said Ten-X Executive Vice President Rick Sharga. “New home construction is still lagging behind demand, about one third of current homeowners don’t have enough equity to put their homes on the market, and there appears to be a psychological barrier coming into play, where homeowners aren’t willing to sell their home because they’re afraid there’s nothing for them to buy. Over time these issues will be resolved, but in the meanwhile, it’s hard to see sales numbers improving significantly.”

Last month, the Ten-X Nowcast projected home sales to hover near their current level, a prediction that was confirmed by the recent National Association of Realtors® (NAR®) release, which showed that total existing-home sales edged higher to a 5.39 million seasonally adjusted annual rate in September. This marks a modest 0.7 percent increase from August’s reported 5.35 million number, though still 1.5 percent lower than a year ago.

Last month’s Ten-X Nowcast also predicted another solid annual gain in existing home prices, which was confirmed by the NAR report, as the median existing-home price for all housing types increased 4.2 percent from a year ago to $245,100 in September. This marks the 67th consecutive month of year-over-year gains as prices continue to advance amid a limited supply of homes for sale. The October Ten-X Residential Real Estate Nowcast predicts that median existing home prices will continue to make annual strides falling between $231,897 and $256,308 with a target price point of $244,103, down 0.4 percent from September, but up 5.1 percent from last year.

“Demand for homes remains solid due to a robust labor market and low mortgage rates,” said Ten-X Chief Economist Peter Muoio. “However, extremely low inventory of homes for sale is a major factor constraining sales and driving up prices, diminishing affordability. High student debt, relatively tight underwriting conditions, and the potential for higher interest rates could further constrain a considerable segment of home buyers.”

About the Ten-X Residential Real Estate Nowcast Model

The Ten-X Residential Real Estate Nowcast combines industry data, proprietary company transactional data and Google search activity to predict market trends as they are occurring – weeks before the findings of other benchmark studies are released. Building upon the groundbreaking work by Google Chief Economist Hal Varian, Ten-X’s nowcast model extends a traditional autoregressive-forecasting model to incorporate contemporaneous information that provides significantly enhanced accuracy.

Existing Home Sales

Chart

Existing Home Sales Pricing

Chart

About Ten-X

Ten-X is the nation’s leading online real estate transaction marketplace and the parent to Auction.com, Ten-X Commercial and Ten-X Homes. To date, the company has sold 300,000+ residential and commercial properties totaling over $50 billion. Leveraging desktop and mobile technology, Ten-X allows people to safely and easily complete real estate transactions online. Ten-X is headquartered in Irvine and Silicon Valley, Calif., and has offices in key markets nationwide. Investors in the company include Thomas H. Lee Partners, L.P. CapitalG (formerly Google Capital) and Stone Point Capital. For more information, visit Ten-X.com.

Existing-Home Sales Inch 0.7 Percent Higher in September

Washington, D.C. – October 20, 2017 (nar.realtor) After three straight monthly declines, existing-home sales slightly reversed course in September, but ongoing supply shortages and recent hurricanes muted overall activity and caused sales to fall back on an annual basis, according to the National Association of Realtors®.

NAR logo

Total existing-home sales(1), which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 0.7 percent to a seasonally adjusted annual rate of 5.39 million in September from 5.35 million in August. Last month’s sales pace is 1.5 percent below a year ago and is the second slowest over the past year (behind August).

Lawrence Yun, NAR chief economist, says closings mustered a meager gain in September, but declined on an annual basis for the first time in over a year (July 2016; 2.2 percent). “Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,” he said. “Realtors® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers.”

Added Yun, “Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida – hit by Hurricanes Harvey and Irma – saw temporary, but notable declines.”

Real Estate Inforgraphic

The median existing-home price(2) for all housing types in September was $245,100, up 4.2 percent from September 2016 ($235,200). September’s price increase marks the 67th straight month of year-over-year gains.

Total housing inventory(3) at the end of September rose 1.6 percent to 1.90 million existing homes available for sale, but still remains 6.4 percent lower than a year ago (2.03 million) and has fallen year-over-year for 28 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.5 months a year ago.

“A continuation of last month’s alleviating price growth, which was the slowest since last December (4.5 percent), would improve affordability conditions and be good news for the would-be buyers who have been held back by higher prices this year,” said Yun.

First-time buyers were 29 percent of sales in September, which is down from 31 percent in August, 34 percent a year ago and matches the lowest share since September 2015. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016(4) – revealed that the annual share of first-time buyers was 35 percent.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage dipped to 3.81 percent in September from 3.88 percent in August and is the lowest since November 2016 (3.77 percent). The average commitment rate for all of 2016 was 3.65 percent.

Nearly two-thirds of renters currently believe now is a good time to buy a home, but weakening affordability and few choices in their price range have made it really difficult for more aspiring first-time buyers to reach the market,” said Yun.

President William E. Brown, a Realtor® from Alamo, California, says Congress should keep in mind the barriers affecting prospective first-time buyers as they move forward with tax reform in the coming months.

“There’s no way around the fact that any proposal that marginalizes the mortgage interest deduction and eliminates state and local tax deductions essentially disincentives homeownership and is a potential tax hike on millions of middle-class homeowners,” said Brown. “Reforming the tax code is a worthy goal, but it should not lead to the middle class, who primarily build wealth through owning a home, footing the bill. Instead, Congress should be looking at ways to ensure more creditworthy prospective buyers are able to achieve homeownership and enjoy its personal and wealth-building benefits.”

Properties typically stayed on the market for 34 days in September, which is up from 30 days in August but down from 39 days a year ago. Forty-eight percent of homes sold in September were on the market for less than a month.

Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in September were San Francisco-Oakland-Hayward, Calif., 30 days; San Jose-Sunnyvale-Santa Clara, Calif., 32 days; Salt Lake City, Utah, 35 days; and Seattle-Tacoma-Bellevue, Wash., and Vallejo-Fairfield, Calif., both at 36 days.

All-cash sales were 20 percent of transactions in September, unchanged from August and down from 21 percent a year ago. Individual investors, who account for many cash sales, purchased 15 percent of homes in September (unchanged from last month and a year ago).

Distressed sales(5) – foreclosures and short sales – were 4 percent of sales in September, unchanged from last month and a year ago. Three percent of September sales were foreclosures and 1 percent were short sales.

Single-family and Condo/Co-op Sales

Single-family home sales climbed 1.1 percent to a seasonally adjusted annual rate of 4.79 million in September from 4.74 million in August, but are still 1.2 percent under the 4.85 million pace a year ago. The median existing single-family home price was $246,800 in September, up 4.2 percent from September 2016.

Existing condominium and co-op sales decreased 1.6 percent to a seasonally adjusted annual rate of 600,000 units in September, and are now 3.2 percent below a year ago. The median existing condo price was $231,300 in September, which is 4.1 percent above a year ago.

Regional Breakdown

September existing-home sales in the Northeast were at an annual rate of 720,000 (unchanged from August), and are now 1.4 percent below a year ago. The median price in the Northeast was $274,100, which is 4.8 percent above September 2016.

In the Midwest, existing-home sales rose 1.6 percent to an annual rate of 1.30 million in September, but are 1.5 percent below a year ago. The median price in the Midwest was $195,800, up 5.4 percent from a year ago.

Existing-home sales in the South slipped 0.9 percent to an annual rate of 2.13 million in September, and are now 2.3 percent lower than a year ago. The median price in the South was $215,100, up 4.6 percent from a year ago.

Existing-home sales in the West increased 3.3 percent to an annual rate of 1.24 million in September (unchanged from a year ago). The median price in the West was $362,700, up 5.0 percent from September 2016.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1. Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90 percent of total home sales, are based on a much larger data sample – about 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2. The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3. Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90 percent of transactions and condos were measured only on a quarterly basis).

4. Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5. Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at Realtor.org.

NOTE: NAR’s Pending Home Sales Index for September is scheduled for release on October 26, and Existing-Home Sales for October will be released November 21; release times are 10:00 a.m. ET.

Redfin: Home Sales Fell 8.1 Percent in September, Third Month in a Row of Declining Sales

Lack of Inventory Stifling the Market Despite Still-Strong Demand

Seattle, WA – October 19th, 2017 (BUSINESS WIRE) (NASDAQ: RDFN) — Home sales fell 8.1 percent compared to last year, the largest decline posted since July 2016, according to Redfin (www.redfin.com), the next-generation real estate brokerage. Meanwhile price-growth is strong, up 7.6 percent in September to a national median sale price of $288,000 across all markets Redfin serves.

Redfin Logo

Nationally, the number of homes for sale plunged 10.9 percent, continuing the 24-month streak of declining inventory. The number of new listings in September fell 7.7 percent from a year ago, leaving 3.3 months of supply. Less than six months of supply signals the market is tilted in favor of sellers.

The median days on market ticked up to 42 in September from 39 in August. The market was still five days faster than last September. The average sale-to-list price ratio was 98.4 percent and 23.6 percent of homes sold above their list price in September.

Weather took its toll in several markets, with Hurricane Irma in Florida and Harvey in Houston. Real estate activity was put on hold as communities dealt with the storm and its aftermath. As a result of hurricane-related disruptions, Redfin expects real estate activity to be more volatile than normal in these markets.

Home sales in Miami, Fort Lauderdale, West Palm Beach, Jacksonville, Orlando and Tampa all declined by more than 15 percent compared to last September. Miami sales took the biggest hit with a year-over-year decline of 38.4 percent. In Houston, home sales tumbled more than 25 percent in August, but recovered in September, and were essentially flat (0.2%) compared to a year ago.

“The housing market is running on fumes due to low inventory,” said Redfin chief economist Nela Richardson. “September marks the first time since 2014 that we’ve seen three consecutive months of year-over-year sales declines. The inventory shortage is most severe for affordable homes. There has not been an increase in homes priced under $260,000 in two years.”

In September, new listings from homes priced in the lowest tercile of the market (under $260,000) were down 14.9 percent year over year. Inventory for the middle tercile of new listings, priced between $260,000 and $470,000, was down 4.7 percent year over year. The only inventory increase was for listings above $470,000, up 2.3 percent from a year ago.

“The good news is that so far markets affected by Hurricane Harvey, like Houston, are rebounding in terms of sales quickly,” said Richardson. “That bodes well for Floridian markets.”

Chart

Other September Highlights

Competition

  • Seattle, WA was the fastest market, with nearly half of all homes pending sale in just 10 days, down from 12 days from a year earlier. San Jose, CA, Boston, MA, and Portland, OR were the next fastest markets at 14 median days on market, followed by Oakland, CA (15).
  • The most competitive market in September was San Francisco, CA where 71.7% of homes sold above list price, followed by 71.6% in San Jose, CA, 64.6% in Oakland, CA, 47.7% in Seattle, WA and 42.7% in Tacoma, WA.

Prices

  • San Jose, CA had the nation’s highest price growth, rising 16.3% since last year to a median of $1 million. Tucson, AZ had the second highest growth at 15.8% year-over-year price growth, followed by Tacoma, WA (14.5%), Las Vegas, NV (14%) and Seattle, WA (13.3%).
  • Just 3 metros saw price declines in September: Camden, NJ (-6.4%), Baltimore, MD (-3.1%) and Newark, NJ (-2.7%).

Sales

  • Home sales in Miami, FL and Fort Lauderdale, FL declined by 38.4% and 32.4%, respectively, as Hurricane Irma ground the market to a halt.
  • 12 of 74 metros saw sales increase from last year. Camden, NJ led the nation in year-over-year sales growth, up 8.8%, followed by Honolulu, HI, up 7.8%. Detroit, MI rounded out the top three with sales up 4.8% from a year ago.

Inventory

  • San Jose, CA had the largest decrease in overall inventory, falling 51.7% since last September. Rochester, NY (-27.3%), Buffalo, NY (-26.9%) and Oakland, CA (-26.5%) also saw far fewer homes available on the market than a year ago.
  • Salt Lake City, UT had the highest increase in the number of homes for sale, up 39.6% year over year, followed by Baton Rouge, LA (34.0%) and Tulsa, OK (13.8%).

To read the full report, complete with data and charts, click here.

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.

Contacts

Alina Ptaszynski
(206) 588-6863
press@redfin.com