As predicted by CEO Glenn Kelman in early November, the housing market ended 2018 not with a bang, but a whimper. U.S. home-sale prices increased just 1.2 percent in December compared to a year ago, to a median of $289,800 across the metros Redfin tracks. The year-over-year increase in home prices was the smallest since the number went positive in March 2012.
The median sale price of homes sold in December fell in nine of the 76 largest metro areas Redfin tracks, including San Jose (-7.3%) and Boston (-1.0%). December was the first month either metro saw home prices fall year over year since January 2012. The swing in home prices has been especially dramatic in San Jose, which saw year-over-year gains in excess of 20 percent between November 2017 and June 2018.
Meanwhile, the number of completed home sales nationally fell faster than it has in two and a half years, down 10.9 percent from December 2017. Home sales declined in 69 of the 76 largest metro areas that Redfin tracks.
“December may feel like a foot on the brake, but the housing market was going over the speed limit,” said Redfin chief economist Daryl Fairweather. “Home prices have been growing faster than wages since 2012, and that can’t go on forever. Now that price growth has slowed down and more homes are sitting on the market, buyers will have the upper hand in 2019. Buyers will have more options with more homes for sale, and it will be sellers working to woo buyers into making an offer. And as a bonus, buyers, for the time being, have the benefit of mortgage interest rates that are lower than they were in late 2018, which will make borrowing more affordable.”
The number of homes newly listed for sale in December fell from a year earlier (-4.1%), but due to the large decrease in home sales, the growth in the number of homes for sale on the market hit a 42-month high, rising 4.8 percent in December.
“Buyers shopping now are benefiting from sellers who are willing to negotiate, since it’s anyone’s guess what the spring real estate market will look like,” said Seattle-based Redfin agent Jessie Culbert. “Well-priced, appealing homes are seeing the return of pre-inspections and even multiple offer situations, so it may be too soon to get comfortable with the idea of a slower market.”
Of the 76 largest metro areas in the country, 46 saw an increase in the number of homes for sale compared to a year earlier, with the largest gains coming in San Jose (+131.3%), Seattle (+117.8%) and Oakland (+69.0%). The metro areas with the biggest decline in homes for sale were New Orleans (-32.3%), Montgomery County, PA (-24.3%) and Philadelphia (-22.4%).
Across Redfin metros, the typical home that sold in December went under contract in a median of 50 days, the same speed as a year earlier. This past December, 18 percent of homes sold above the list price, down from 21 percent from the prior December. Meanwhile 16 percent of homes on the market in December had a price drop, slightly higher than December 2017’s share of 14 percent. The share of homes that went under contract within two weeks was up month-over-month, increasing from 25 percent in November to 31 percent in December, but was down from 34 percent in December 2017.
Below are market-by-market breakdowns for prices, inventory, new listings and sales for markets with populations of 750 thousand or more. For downloadable data on all of the markets Redfin tracks, visit the Redfin Data Center.
