The housing market frenzy of 2013 has officially come to a close. In line with normal seasonal trends, home sales, prices, and inventory all dropped from August. Prices had their third consecutive month-over-month drop, falling 2.2 percent this month. Home sales dropped 19 percent from August, and inventory fell 3.4 percent. However, the continuing housing market recovery is still evident in year-over-year gains, both in home prices and sales volume. Low inventory is still the thorn in the market’s side, with an annual decrease of 17.5 percent.

In September, 11 cities showed month-over-month price declines versus 10 cities last year. Colder climates, as usual, showed larger seasonal declines in prices. For example, Philadelphia, Chicago, and Long Island posted 8.2 percent, 6.1 percent, and 5.7 percent month-over-month declines while Riverside, CA, San Diego and Austin kept things hot a bit longer with 2.4 percent, 1.5 percent, and one percent month-over-month increases.

Median Sale Price for Homes, Condos ant Townhomes over the past Four Years Across 19 U.S. Markets
Median Sale Price for Homes, Condos and Townhomes over the past Four Years Across 19 U.S. Markets (Click image for full size chart.)

In September home sales fell 18.8 percent, a large drop, but in step with normal seasonal trends. Comparatively, sales dropped 19.3 percent between August and September 2012. Based on current pending sales data, Redfin estimates October will have a 6 percent drop in sales from September compared to an 8 percent rise during the same period last year.

Homes Sold by Month Across 19 U.S. Markets.
Homes Sold by Month Across 19 U.S. Markets (Click image for full size chart.)

Homes continue to sell quickly, but they are not being replaced by new listings. There are two big reasons why people are not listing their homes: they are underwater on their current mortgage, or their mortgage interest rate is so low that a new loan would be much more expensive. Not surprisingly, we do not expect the inventory situation to improve as the holidays approach.

Homes For Sale At the End of Each Month Over the Past Four Years for 19 Markets
Homes For Sale At the End of Each Month Over the Past Four Years for 19 Markets (Click image for full size chart.)

Redfin’s monthly report on home prices, inventory levels and sales volume is an up-to-date, accurate portrait of the U.S. real estate market, published before other market reports. As a broker with access to dozens of Multiple Listing Services (MLSs) used by real estate agents to list properties and record sales, Redfin gets data within minutes of a sale, pending sale or listing activation, well before any government, media or analytics organization. Full data for September 2013 may be downloaded in a spreadsheet.