The Redfin Housing Demand Index fell 6.9 percent to 116 in March from a year earlier, marking the fourth consecutive month of year-over-year declines in overall homebuyer demand. Early-stage demand remains strong, with the number of Redfin customers requesting tours up 19.1 percent year over year, about the same level of growth seen in February. But we’re seeing demand peter out from there, as the number of customers writing offers fell 7.5 percent year over year in March, following a 4.1 percent increase in February.
“Despite an increasing number of people searching for homes, fewer are taking the plunge and making offers due to a scarcity of homes for sale and a lot of competition from other buyers,” said Redfin chief economist Nela Richardson. “The result has been, and will likely continue to be, modest sales growth so far this year.”
Across the 15 metro areas measured by the Demand Index, home prices were up 4.7 percent in March from a year earlier as sales grew a modest 2.8 percent. The total number of homes for sale fell 1.7 percent, the 11th consecutive month of declines, even as new listings grew 7.7 percent.
The continually falling inventory makes it harder for buyers to find homes that fit the bill, which is one reason why fewer are making offers this year than last. Even though fewer buyers are making offers, those who do are likely to face competition over the rare desirable home that hits the market.
Last month, 62 percent of offers Redfin agents wrote faced bidding wars, a slight decrease from 63 percent a year ago. And 27 percent of homes sold for more than their asking price, up from 25 percent last year. The typical home stayed on the market for just 22 days, five days fewer than last year.
Bidding wars are heating up as 66 percent of Redfin offers faced competition and the typical home went under contract in just 17 days so far in April.
“Being successful in this market often requires losing out in a few bidding wars to learn what it takes to win a hot home in a desirable neighborhood,” said Redfin agent Niko Voutsinas in Chicago. “Once a buyer finds that special property that really stands out to them, they’re ready to move quickly and aggressively to win the bid. Finding and winning the right home is more about determining how much the home is worth to you and making an offer that reflects that than focusing only on the ‘fair market value.’”
The Demand Index tracks millions of visits to Redfin.com and the touring and purchase offers of thousands of Redfin customers in 15 major metro areas. The index equaled 100 on January 2013, the first month of the estimation period, and is adjusted for changes in Redfin market share.
Redfin Journalist Services
Phone: 206-588-6863
Email: press@redfin.com
Nela Richardson, Ph.D., Chief Economist
Phone: 206-435-7264
Email: nela.richardson@redfin.com
