Home prices in August surged 7.7 percent, the largest year-over-year price gain since May 2015. The national median sale price was $293,000, flat from July. None of the metro areas Redfin tracks saw prices decline in August. The median value of off-market homes in August was $251,000, as measured by the Redfin Estimate, up 0.7 percent from July.
Sales in August fell 5.5 percent compared to last year, the largest decline posted since July 2016. This follows the 5 percent decline posted in July by the Redfin Housing Demand Index.
The number of homes for sale plunged 12.4 percent, the largest year-over-year decline in a 23-month streak of declining inventory. The number of new listings in August was down 1 percent from a year ago, leaving just 2.8 months of supply. Less than six months of supply signals the real estate market is tilted in favor of home sellers.
In the San Jose, Calif. metro area, inventory plummeted 50 percent in August compared to a year ago, leaving less than a one-month supply, the lowest of all markets Redfin tracks.
Nearly a quarter (24.9%) of homes sold above their list price. The average sale-to-list ratio was 98.5 percent. The typical home that sold in August went under contract in 39 days, two days longer than July’s record-setting pace, typical of a seasonal slowdown.
“The real estate market still favors sellers, with strong demand and rising home prices, but perhaps less so now than earlier in the year,” said Redfin CEO Glenn Kelman. “Newly listed homes are selling faster in 2017 than in 2016, but whereas in April the market was nine days faster than the 2016 market, in August it was five; the gap between 2016 and 2017 is narrowing slightly. Normally such differences wouldn’t be worth mentioning, but Redfin managers of coastal markets where demand has been strongest are now reporting that some home buyers are stepping back from higher prices.”
Forty-three percent of homes listed for sale in July were priced higher than their concurrent Redfin Estimate, a measure of a home’s value and prediction of its eventual sale price, compared to 46 percent in July. The median list price-to-Redfin Estimate ratio was 100.2 percent, which means the typical home for sale last month was priced in line with its estimated value.
Harvey Hits the Houston Housing Market, But Inventory Still High by Comparison
Hurricane Harvey slammed Houston in the last week of August, when many of the month’s pending home sales were scheduled to close. While most real estate activity halted for a few days immediately following the storm, Redfin agents reported rebounding buyer interest, tours and offers in the final days of the month.
Houston sales fell 29 percent year over year, as home buyers backed out of purchasing homes due to flood damage. Lenders also required homes to be reinspected before allowing homes closings to move forward, causing some home settlements to be delayed. Flood damage is limiting the number of homes being listed for sale. New listings declined 12.2 percent compared to last August. Despite the decline in new listings, inventory was still up 5.7 percent compared to last year.
Prices grew 4 percent from last August and Redfin chief economist Nela Richardson predicts homes prices will rise at a faster pace due to the storm.
“Houston has been one of the few big-growth cities gaining inventory this year, but the flooding abruptly wiped out a sizable chunk of the housing stock” said Richardson. “As seen from other weather events, the lack of supply will cause both rents and home prices to rise in the near term.”
“Looking ahead to Irma’s impact in the Southeast, we are just now starting to gather information as power is being restored to parts of the region. Based on Redfin home tour request data, we know that touring has all but halted in Florida in the past week,” said Richardson.