The Redfin Housing Demand Index rose 7.1 percent to 83 in November from a year earlier, nearly double October’s 3.7 percent increase. The number of Redfin customers requesting home tours rose 28.8 percent, slightly weaker growth than the 33.7 percent increase seen in October. But growth in the number of customers writing offers strengthened to 7.7 percent from 5 percent year-over-year growth in October.
While the Demand Index has fallen substantially from its peak of 125 in March, it is still much stronger than levels seen the past two Novembers when housing market activity slows for the holiday season. Throughout 2015, there has been more demand for homes than there was last year, but there hasn’t been enough inventory to keep up with it. As a result, we’re still seeing strong demand heading into the end of the year.
“Unlike the late summer and early fall buyers whom we described as hesitant to overpay or make an offer on a house that wasn’t perfect, people who are in the market through this holiday season are serious buyers who need to move now,” says Redfin chief economist Nela Richardson. “And there are more of them than this time last year even though there are fewer homes to choose from. These buyers can’t wait until 2016 for the traditional spring surge in inventory; they’re pouncing now!”
The number of newly listed homes across the 15 markets tracked by Demand Index has increased year over year each month this year, most recently by 7 percent in November. Meanwhile, the total number of homes for sale has fallen for seven consecutive months, with a 4 percent drop in November. This means that buyers are purchasing homes faster than homes are being listed for sale. A typical home stayed on the market for just 26 days in November, down from 33 days last year. Despite the quick pace of sales, the inventory shortage is holding back their total number, flat year over year, while prices grew by 6.9 percent, the strongest price growth seen since January.
Some sellers are taking advantage of the situation. “This fall the inventory shortage has trumped seasonality, and we’ve been advising sellers who are ready to go ahead and list during the normally slow holiday season,” said Peter Phinney, a Redfin agent in Boston. “The buyer pool is still robust, but there’s not much for them to choose from. We’ve had positive outcomes for sellers who would have otherwise waited until the new year and faced more competition.”
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
