The Redfin Housing Demand Index fell 11.4 percent to 89 in January from a year earlier after flattening in December. What’s interesting is that tours and offers moved in opposite directions in January. The number of Redfin customers requesting tours rose 13.1 percent year over year, but the number of customers writing offers fell 6.4 percent. This is the first year-over-year decline in offers since December 2014.
The median home sale price was up 6.3 percent year over year across the 15 markets tracked by the Demand Index.
“It would be easy to blame high prices for scaring off buyers,” said Nela Richardson, Redfin chief economist. “But that’s only part of the story, as there is clearly a large group of buyers actively touring homes for sale. Inventory, which has fallen to its lowest level since December 2013, is squeezing out buyers who either can’t get into homes fast enough, or aren’t willing to partake in a bidding war against dozens of other buyers and watch the price escalate even higher.”
This is also supported by the fact that home sales were up 7.4 percent year over year in January, even though inventory dropped 7.2 percent and new listings fell for the first time since October 2014 by 1.9 percent.
Despite a lower Demand Index level, 2016 is feeling more competitive for homebuyers than last year. In February (as of the 10th), 60 percent of offers written by Redfin agents have faced competition. That’s up from 56 percent in January and from 53 percent in January of last year.
Homes are selling faster and for more money, too. Last month, the typical home went under contract in 34 days, eight days faster than last year. Nearly 22 percent of homes sold for more than their asking price, up from 19 percent last year, with the sale-to-list price ratio up slightly to 98.4 percent from 98.0 percent.
“Denver is seeing an unprecedented level of home-buying competition,” said Redfin agent Michelle Ackerman. “Earlier this month, one home had 132 showings in a single weekend. Getting into a home and finding out there are already several offers often ends up discouraging more buyers from offering. We’re now advising serious buyers to wait to submit their offers until the end of the offer period for the best chances of gauging how many offers they’re up against and how best to compete.”
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.
For Further information
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
