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Redfin Report: Home Prices Up 5.3% in July, Continuing a Trend of Moderating Growth

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Sales Rebounded, up 4.1%, as Inventory Declined Just 5.4% from Last Year

San Jose, Seattle and Portland Posted Double-Digit Inventory Increases for the Second Month in a Row

Home-Selling Speed Slowed Dramatically in Washington, D.C. as it Accelerated in Indianapolis and Atlanta

Seattle, WA – Aug. 17, 2018 (PRNewswire) (NASDAQ: RDFN) U.S. home-sale prices increased 5.3 percent year over year to a median of $307,400 in July, according to Redfin (www.redfin.com), the next-generation real estate brokerage. The price growth rate has been dropping for five consecutive months and has not been this low since September 2016. Homes sales increased 4.1 percent in July compared to July 2017 as inventory declines continued to moderate.

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The number of homes for sale in July was down 5.4 percent year over year. This marks the third month of supply declines around 5 percent following 19 months of inventory declines of over 7 percent.

Homes that sold in July went under contract in a median 35 days, three days faster than last year and one day slower than in June. While homes are still selling near a record-fast pace, there are some signs competition is waning. For the first time since March 2015, the share of homes that sold above asking price declined year over year– albeit slightly– from 26.5 in July 2017 to 26.2 percent last month. Twenty-eight percent of homes on the market in July had a price drop, the largest share on record since Redfin began tracking this metric in 2009, and a 3.2 percentage-point increase over last July. It’s worth noting that the share of homes with price drops typically peaks each year in July or August.

Metro Trends

For the second month in a row, inventory increased year over year by double digits in San Jose, California, (28.0%) Seattle (27.0%) and Portland, Oregon, (21.8%). These markets also experienced sales declines of 11.9 percent, 6.4 percent and 6.1 percent, respectively. In Portland, homes took a median 15 days on market (DOM) to sell, a full week longer than last July. In San Jose (16 DOM) and Seattle (9 DOM), it took one and two days longer, respectively, for homes to find a buyer this July compared to last year.

Home prices continued to rise in these metros year over year, but they are rising at a slower rate. In Portland, home prices were up 4 percent year over year, the lowest price growth in 41 months. Seattle home prices increased 8 percent compared with last year, the lowest growth in 27 months. San Jose home prices grew 19.3 percent. While still the highest growth of any metro Redfin tracks, this was the lowest price growth San Jose has seen in nine months.

Taylor Marr, Redfin senior economist, said, “The Bay Area, Seattle and Portland have been so competitive for so long that buyers and sellers have adjusted to those conditions and may feel uneasy about the changes we’re seeing in the market. After several years of shrinking inventory and unsustainable price growth, I’m encouraged by these changes as a signal that we may be returning to a healthier, more balanced market.”

The market is also slowing down in Washington, D.C., and Baltimore where homes took 19 days and 10 days longer to sell than last year, respectively. Home prices grew just 0.7 percent in Washington, D.C. and fell 0.5 percent in Baltimore. Sales in Washington, D.C. grew 12.7 percent as inventory increased 9.1 percent. Baltimore sales surged 55.7 percent compared to last July, though this can be partially attributed to unusually low number of sales last year. The supply of homes in Baltimore declined less than a percent in July compared to last year.

Mary Bazargan, a Redfin agent in Washington, D.C. says well-priced homes in popular neighborhoods continue to get interest, but buyers seem more hesitant to write offers.

“I recently listed a gorgeous D.C. home at a price we thought would attract multiple offers the first week, but despite a lot of tours, it took three weeks to receive an offer. That kind of buyer reluctance is becoming more common, so it’s important that sellers are informed about what’s been happening over the past few weeks, instead of aligning their expectations with what happened in April or May.”

While these hot coastal markets are showing signs of cooling, competition is heating up in some smaller, inland metros. In Indianapolis the typical home that sold in July found a buyer in 10 days, 25 days faster than last July. In Atlanta (23 DOM); Rochester, New York (15 DOM); Buffalo, New York (14 DOM); and Knoxville, Tennessee (55 DOM), homes sold more than two weeks faster this year compared to last year.

Jake Johnson, Redfin’s market manager in Indianapolis, said a drastic year-over-year decline in inventory (-27.6%) is causing competition to escalate. “We’re caught in the cycle where sellers are afraid to list because they aren’t sure if they’ll find a home to buy. In popular neighborhoods, homes that would have received two or three offers last year are getting eight to 10. Homes in the $250,000 to $350,000 price range are going under contract within days. Because Indianapolis hasn’t traditionally been a hot market, we’re educating buyers about how the market is changing and how we can craft an offer to win in a bidding war.”

Other July Highlights

Speed and Competition

  • Grand Rapids, MI was the fastest market, with half of all homes pending sale in just 8 days, down from 11 days from a year earlier. Boston, Denver and Seattle were the next fastest markets with 9 median days on market, followed by Indianapolis (10).
  • The most competitive market in July was San Francisco where 76.3% of homes sold above list price, followed by 71.7% in San Jose, CA, 70.0% in Oakland, CA, 51.3% in Tacoma, WA, and 50.8% in Boston.

Prices

  • San Jose, CA had the nation’s highest price growth, rising 19.3% since last year to $1,163,500. Detroit had the second highest growth at 15% year-over-year price growth, followed by Tacoma, WA (12.7%), Memphis, TN (12.5%), and Salt Lake City (12.2%).
  • 2 metros saw price declines in July: Camden, NJ (-0.9%), and Baltimore (-0.5%).

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    Sales

    • 13 out of 73 metros saw sales surge by double digits from last year. Baltimore led the nation in year-over-year sales growth, up 55.1%, followed by Camden, NJ, up 40.8%. Oklahoma City rounded out the top three with sales up 20.1% from a year ago.
    • Miami saw the largest decline in sales since last year, falling 17.9%. Home sales in Buffalo, NY and San Jose, CA declined by 12.9% and 11.9%, respectively.

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      Inventory

      • San Jose, CA had the highest increase in the number of homes for sale, up 28.0% year over year, followed by Seattle (27.0%) and Portland, OR (21.8%).
      • Las Vegas had the largest decrease in overall inventory, falling 33.6% since last July. Albuquerque, NM (-32.1%), Indianapolis (-27.6%), and Rochester, NY (-26.2%) also saw far fewer homes available on the market than a year ago.

      Redfin Estimate

      • The median list price-to-Redfin Estimate ratio was 92.5% in San Francisco, CA, the lowest of any market. This indicates the typical home for sale in July was listed below its estimated value. Only 5.9% of homes in San Francisco, CA were listed for more than their Redfin Estimate.
      • Conversely, the median list price-to-Redfin Estimate ratio was 102.3% in Miami, FL and 102.0% in West Palm Beach, FL, which means sellers are listing their homes for more than the estimated value in those metro areas. In Miami, FL, 84.4% of homes were listed above their Redfin Estimate, the highest percentage of any metro.

      To read the full report, complete with charts and market-level data, please visit: https://www.redfin.com/blog/2018/08/market-tracker-july-2018.html.

      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 $60 billion in home sales.

Redfin Launches Compete Score™ to Help Homebuyers Understand What it Takes to Win a Home in Cities Across the Country

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With a Compete Score of 100, Seattle, San Jose and Fremont, Calif., are the Most Competitive Cities in the U.S.

Seattle, WA – July 24, 2018 (PRNewswire) (NASDAQ: RDFN) Redfin (www.redfin.com), the next-generation real estate brokerage, today announced Redfin Compete Score, a rating of housing competition in cities and neighborhoods on a scale of 0 to 100, where 100 is the most competitive. Compete Score can be found on Redfin.com pages for individual listings as well as on the Home Values page for any city or neighborhood where more than 25 homes were sold in the last year. Redfin is also introducing the first Compete Score Report to calculate the most and least competitive cities and neighborhoods across the country.

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Because Redfin has a customer database that is used by every agent for every customer at every step of buying or selling a home, Compete Score is determined using data that no other brokerage or website has. Compete Score is calculated using Redfin proprietary data, including the number of competing offers and number of waived contingencies for homes sold by Redfin, as well as data from local multiple listing service (MLS) databases, including the sale-to-list price ratio and number of days on market for homes in that area.

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“Using data and insights that only Redfin has, Compete Score helps home buyers navigate the competition and sellers understand what to expect when listing a home,” said Matt Lerner, Senior Vice President, Product & Design at Redfin. “Compete Score helps sellers understand how long a home could take to sell, whether it’s likely to sell for more or less than the asking price and how to list the home at a price that is likely to attract multiple offers. For buyers, Compete Score helps them understand how aggressive they need to be to win the home they want, including how much to bid, whether they need to waive contingencies and how fast they need to act.”

“Compete Score is an example of how Redfin captures more data than any other brokerage or website. We do this because every customer asks for service via our online tools, and every agent uses those tools to deliver better service, in preparing offers, activating listings, scheduling tours and negotiating sales,” said Glenn Kelman, CEO of Redfin. “No human being could make sense of so much data, but Redfin’s software processes this information to recognize subtle shifts in the market from month to month and neighborhood to neighborhood. As a result, our customers will know when a neighborhood is getting hot, or when the whole market is about to turn, before anyone else.”

The first Compete Score report finds that, among U.S. cities with populations of at least 200,000, the most competitive cities are Fremont and San Jose, Calif. and Seattle. The least-competitive large cities in the U.S. are New Orleans, LA and El Paso, TX. In some cases, desirable neighborhoods may be less competitive than expected because they are more expensive and receive fewer offers.

Most Competitive Cities in the U.S.

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Least Competitive Cities in the U.S.

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“Many of the most competitive cities are technology hubs that have attracted an influx of people moving to the area for jobs, unmatched by the creation of new homes,” said Taylor Marr, Senior Economist at Redfin. “This has led to intense competition and rising home prices. In San Francisco, Seattle and Denver, homes have become so expensive that many people are moving elsewhere in search of more affordable and less competitive housing markets.”

In looking at Compete Score data for neighborhoods nationwide, more than 100 have a Compete Score of 97 or higher and six have a score of 100, the highest score possible. The vast majority are in the Seattle and San Francisco Bay Areas.

Most Competitive Neighborhoods in the U.S.

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At launch, Compete Score is available for more than 8,200 cities and 13,000 neighborhoods across the country. In order to maintain accuracy, Compete Score is only available in areas where at least 25 homes have been sold within the last 12 months. Redfin will update Compete Score for all areas at the beginning of every month.

To read the full Compete Score report with the complete list of most and least competitive cities and neighborhoods across the country, click here.

To read more about how Compete Score is calculated and how it benefits home buyers and sellers, 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 $60 billion in home sales.

June Home Prices Rose 5.7% Year Over Year; Smallest Increase Since December 2016

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Inventory Declines Continue to Moderate; Number of Homes for Sale in June Down Just 6% Compared to June 2017

Seattle, WA – July 24, 2018 (PRNewswire) (NASDAQ: RDFN) U.S. home-sale prices increased 5.7 percent year over year in June to a median of $312,700, according to Redfin (www.redfin.com), the next-generation real estate brokerage. This is the lowest price growth since December 2016. At the same time, the number of homes for sale in June was down just 6 percent year over year, which continues the gradual easing of year-over-year inventory declines since January of this year.

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Homes sales fell 3.3 percent in June compared to June 2017. However, it’s important to note this is partially due to the fact that June 2017 had five Thursdays, a common day for home purchases to close, compared to this June, which had just four. If June 2017 did not have the fifth Thursday, year-over-year homes sales would be up by 1.2 percent.

Homes also sold at their fastest pace on record, a median 34 days in June, unchanged from May and three days faster than last year.

Notably, in what have been the most competitive places for homebuyers, inventory is increasing, providing welcome relief for some buyers. The number of homes for sale in June increased by double digits in Portland (31.6%), San Jose, CA (11.9%) and Seattle (24.2%). These markets also experienced sales declines of 9.6 percent, 16.3 percent and 10.1 percent, respectively.

“The affordability crisis may have reached a breaking point in Portland, San Jose and Seattle,” said Redfin CEO Glenn Kelman. “After 75 straight months of price increases in these markets that far outpaced wage growth, homebuyers are now becoming selective about which homes to buy, and at what price. The homes that did sell in June still sold quickly, but buyers were significantly more likely to reject homes that were less desirable or aggressively priced by the seller: the percentage of listings in these markets that sold within two weeks declined in June from 61 percent to 52 percent, and the fraction of listings that dropped their price increased from 31 percent to 33 percent.”

“We’ve seen similar signs of buyer fatigue in the past, especially at this point in the season,” Kelman continued. “But in this case the lull has lasted a bit longer and affected more markets than in the recent past. It’ll be interesting to see whether buyers adjust to the latest price increase and come back in force this fall, or if instead we see these markets shift more in favor of buyers.”

“Buyers are taking advantage of the inventory windfall,” said Shoshana Godwin, a Redfin agent in Seattle. “A handful of my buyers who had been sitting out the market for over a year have, over the last two months, gotten homes under contract. We targeted homes that were still on the market after their offer review date and were able to include most offer contingencies, including the inspection. That’s been virtually unheard of in Seattle for the past few years.”

Redfin will be paying close attention in the coming months to the data and to its agents’ observations to see if the trends in Portland, San Jose and Seattle continue, progress or show up in other markets.

Other June Highlights:

Speed

  • Competitiveness eased in Seattle in terms of the portion of homes selling above asking, down 7.3 percentage points year over year from 62.1% to 54.8%. However, it was still the fastest market, with a sale pending on half of all homes in just seven days, keeping pace with June of last year. It’s important to note that the homes that sold, sold quickly. But more homes stayed on the market, hence the rise in inventory. Denver, Omaha, NE, Tacoma, WA and Grand Rapids, MI were the next fastest markets with eight median days on market each.

Prices

  • San Jose, CA had the nation’s highest price growth, rising 22.4% since last year to $1,225,000. Las Vegas had the second highest growth at 12.8% year-over-year price growth, followed by Oakland, CA (11.9%), Cincinnati (11.4%), and Seattle (11.4%).
  • No metros saw price declines in June.

Sales

  • Just three out of 73 metros saw double-digit sales growth compared to last year. Camden, NJ led the nation in year-over-year sales growth, up 52.4%, followed by Pittsburgh, PA, up 10.4%. Long Island, NY rounded out the top three with sales up 10% from a year ago.
  • Oxnard, CA saw the largest decline in sales since last year, falling 25.6%. Home sales in San Jose, CA and West Palm Beach, FL declined by 16.3% and 15.1%, respectively.

Inventory

  • Baton Rouge, LA had the highest increase in the number of homes for sale, up 51.1% year over year, followed by Portland, OR (31.6%) and Seattle (24.2%).
  • Rochester, NY had the largest decrease in overall inventory, falling 33.3% since last June. Indianapolis (-30.3%), Buffalo, NY (-30.0%), and Milwaukee (-24.2%) also saw far fewer homes available on the market than a year ago.

Redfin Estimate

  • The median list price-to-Redfin Estimate ratio was 93.2% in San Francisco, the lowest of any market. This indicates the typical home for sale in June was listed at a price below its estimated value. Only 6.3% of homes in San Francisco were listed for more than their Redfin Estimate.
  • Conversely, the median list price-to-Redfin Estimate ratio was 102.3% in Miami, FL and 102.1% in West Palm Beach, FL, which means sellers are listing their homes for more than the estimated value in those metro areas. In Miami, FL, 83.4% of homes were listed above their Redfin Estimate, the highest percentage of any metro.

To read the full report, complete with charts and market-level data, please visit: www.redfin.com.

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 $60 billion in home sales.