The median home sale price rose 4.7 percent to $267,600 in December, continuing a steady trend of growth that we expect to continue this year. Home sales were essentially flat compared to last December, increasing 0.5 percent, while inventory posted its largest year-over-year decline since April 2013, falling 12.7 percent.
December is typically a slow month for new listings, and 2016 was no exception. The number of new homes for sale added to the market fell 5.0 percent compared to 2015 and declined 26.8 percent from the month prior. Following an extraordinarily strong November for home sales, there were very few homes left to choose from in December, leaving the total number of homes for sale in the markets Redfin tracks the lowest it has been in three years.
“Prospective sellers were hesitant to list last month,” said Redfin chief economist Nela Richardson. “Many of them are also buyers, and two transactions are much harder to pull off in a fast-paced, low-inventory environment than one. We expect sellers to list early in 2017, not only to make top dollar from eager buyers, but also to be in a position to act quickly when it comes time to make their next home purchase.”
While home sales were tepid, the extreme lack of inventory kept the market moving quickly. The typical home went under contract in 54 days — five days faster than December 2015 and the fastest December on record since Redfin began tracking this data in 2010.
Among homes that sold in December, just shy of one-third (32.7%) went under contract within two weeks — the largest reduction in inventory in any single month on record.
“We’ve never before seen homes turn over so quickly at a national level,” said Redfin Chief Economist Nela Richardson. “This tells us that buyers are not deterred by low inventory, election uncertainty and slightly higher mortgage rates. If anything, these headwinds are motivating them to act sooner rather than later.”
The increased speed of the market was also felt locally as well, especially in the nation’s most competitive markets, such as Seattle, Washington. As inventory continues to tighten, Redfin agents are seeing a change in the way clients are approaching the homebuying process.
“Homebuyers acted with a great deal of speed and purpose this December,” said Redfin Seattle real estate agent Paul Bettinson. “In years past, buyers who didn’t find a home by December typically went into hibernation for the winter, holding off until the spring selling season. Now everyone is taking a second look at the homes that may need a little TLC. In general, today’s buyers are well-equipped to move quickly — they’ve done their research, know the market and are very motivated to make it happen.”
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Inventory
Below are market-by-market breakdowns for prices, inventory, new listings and sales for markets with populations of 1.5 million or more. For downloadable data on all of the markets Redfin tracks, visit the Redfin Data Center.
