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Redfin data shows that homes sold faster than ever in April

(REAL ESTATE DATA) Redfin data shows that homes sold faster than ever in April 2017.

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MID mortgage interest deductions existing home sales

Low inventory

It seems that the only problem with the housing market today is that there aren’t enough houses for sale. According to Redfin, houses sold faster than ever in April, and the trend is only set to increase.

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Redfin trends

The reports from Redfin show an increase across the board for the housing market. Nationwide, the typical home entered a contract within the first 40 days on the market. Additionally, 20% of those homes were under contract within only two weeks.

In addition, home prices increased 6.2% since last year, bringing the median sale price to $280,000.

The housing market is breaking records across the board and Redfin Chief Economist, Nela Richardson, predicts an accelerating market through June. Everyone is ready to report higher numbers but there is just one problem.

They need more inventory.

In sharp contrast to the soaring sales, housing inventory has been in a steep decline for the last nineteen months.

In fact, Redfin reported the biggest drop in the last four years this April at 13.3% less homes for sale.

Rochester, NY saw the largest decline in overall homes for sale, falling almost 40% since last year. However, there is still hope. Especially with the growing demand for homes. Inventory increased in some major U.S. cities including Fort Myers, FL, Knoxville, TN and even here in Austin, TX.

Other trends

Sifting through the details of the Redfin data shows a few other trends regionally for the housing market. For instance, the highest competition remains along the west side of the nation. Denver, CO reported the fastest market with over half of sold homes entering a contract in less than a week. Other fast markets included Seattle and Tacoma in Washington followed by Portland, OR.

All homes sold were under contract within 10 days or less.

The west coast also saw the best competition for homes selling above market price. Over three quarters of the homes sold in San Jose, CA, sold above their listing price. Close behind was San Francisco and Oakland, followed by Seattle and Tacoma.

On the up

For sellers, the good times are expected to keep rolling. Redfin predicts the market continuing this upward trend. The next step is getting more people to sell their homes.

Natalie is a Staff Writer at The Real Daily and co-founded an Austin creative magazine called Almost Real Things. When she is not writing, she spends her time making art, teaching painting classes and confusing people. In addition to pursuing a writing career, Natalie plans on getting her MFA to become a Professor of Fine Art.

Real Estate Big Data

International interest in US real estate is waning

(REAL ESTATE BIG DATA) New NAR survey shows the continued decline of international interest in US properties.

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Evictions, boomerang kids, and bankruptcies, oh my! What other dramatic twists does 2020 have in store for the housing market? Apparently, now international interest in US homes is waning.

The National Association of Realtors recently released a study showing foreign investment in US homes is down 5%, marking a second consecutive year of decline.

From April 2019 to March 2020, home sales to both recent US immigrants and buyers residing overseas have decreased 8% and 1% respectively compared to the previous twelve month period.

The report highlights a few more key findings: Notably, Chinese buyers continue to be incredibly influential on global real estate markets, and the US is no exception. But Canada is also an important player here in the States. Since 2013, China and Canada have led US residential sales by dollar volume, buying $11.5 billion and $9.5 billion in houses respectively last year.

Those large numbers are partially thanks to the fact that houses sold to international buyers tend to be more expensive compared to the national median, as many choose to live in cities or expensive states like California and New York. Florida, though, remains the undisputed champion for attracting foreign house hunters, accounting for 22% of home sales to international clients.

NAR Chief Economist Lawrence Yun states that some international buyers, like American residents, find it challenging to purchase homes in the US due to a lack of housing inventory. Other contributing factors include “less cross-border travel, falling international trade and fewer foreign students attending American universities,” says Yun.

The NAR press release asserts that international interest in US real estate is still strong. As Americans migrate to more affordable, less populated areas at this time, according to Yun, “better opportunities may become available for foreign buyers in large US cities like New York and San Francisco.”

But the late spring and summer months responsible for the majority of the impact of COVID-19 in the United States are not part of the scope of this study. And while I know nobody wants to admit it, the full extent of COVID-19 remains to be seen in this country. This decline could indicate the start of a larger trend, but only time will tell.

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Real Estate Big Data

Real estate myths created during the pandemic

(REAL ESTATE BIG DATA) Real estate is a finicky field, but the most popular myths surrounding the effects of COVID-19 on the market are purely unfounded.

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real estate myths

In the past six months, there has undoubtedly been a large amount of misinformation regarding the Coronavirus, its treatment, and the long-term ramifications of a pandemic–a phenomenon that has affected, among other industries, real estate. Courtesy of SFGate, here are a few myths you’re likely to experience in the current market.

The first myth–and, arguably, the most prevalent one–asserts that selling your home amidst COVID-19 restrictions is a poor choice. In fact, the opposite is true: Danielle Hale, a real estate expert, explains that people have been able to sell at relatively high rates despite the pandemic. “As long as buyer demand remains strong, I expect the market to remain tipped in favor of sellers,” she adds.

Of course, both taking the proper precautions during showings and maintaining social distancing–along with affording buyers an appropriate amount of grace when settling on a closing date–are important attributes of making a successful sale during this time.

Another myth you’ll probably hear about is tangentially connected to the first–that home prices are declining, thus making it, again, a bad time to sell. This is simply untrue; Lawrence Yun of the NAR points to low mortgage rates, as well as a general lack of people selling during this time, as the culprit. It makes sense that people would want to protect their investments for the time being, after all.

Thirdly, and lastly in the buying-and-selling myth pantheon, you’ll find that people are actually buying houses more now than they were before the pandemic–a direct answer to the myth that buyers are hesitant to close on properties for now. Just like the last item, you can look to low interest rates and high demand as the justification here.

Then, there is the myth that you can no longer tour homes in person seems real enough, and it may be standard practice for some sellers; however, the majority of homes being sold in the United States, as of now, are viewable in person–and, more importantly, with the viewer’s safety at the forefront of the seller’s endeavors. However, SFGate does point out that, due to rising cases in much of the United States, some of these restrictions may eventually return.

Finally, the myth that buyers are actively attempting to leave cities in favor of suburb living seems to be circulating as of late. SFGate acknowledges that this myth is “partly true”, but that doesn’t mean city listings aren’t available–nor does it mean city dwellings will begin to lose their value. After all, urban living has consisted of largely prime real estate for as long as any of us can remember, and the Coronavirus probably won’t outlast that allure.

The bottom line is this: Real estate, like everything else, has been affected by COVID-19–but it hasn’t been completely turned on its head and wiped out like some may think.

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Real Estate Big Data

Home sales dive 10% in May – when is a sales rebound expected?

(REAL ESTATE) Home sales plummet in May, which we all expected, but when will sales begin to recover in light of this pandemic?

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home sales

As you would expect, May marks the third consecutive month of home sales declines amidst a global pandemic. According to the National Association of Realtors (NAR), existing home sales fell 9.7% in May compared to April, down a whopping 26.6% compared to this time last year.

The silver lining is that values continue to improve, with a median existing home price of $284,600 nationally, up 2.3% from May 2019, marking the 99th month of year-over-year gains.

Inventory levels rose 6.2% from April, and are down 18.8% from May 2019. Average days on market didn’t move much, at 26 days being equal to May 2019, and down from 27 days in April.

“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Dr. Lawrence Yun, NAR’s chief economist.

He added, “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”

Sales also reflected an uptick in suburban sales over urban home sales. Dr. Yun cited work from home demands, however, anecdotally we would add some people moving away from densely populated areas in response to recent unrest.

What will ease housing conditions?

As he has observed repeatedly in recent years, Dr. Yun points to home builders. “New home construction needs to robustly ramp up in order to meet rising housing demand. Otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”

Mortgage Banker’s Association’s (MBA’s) SVP and Chief Economist, Dr. Mike Fratantoni’s insight pointed to inventory challenges as well: “As buyers are returning to the market, as evidenced by the strong, nine-week rebound in MBA’s purchase application data, the lack of homes for sale will be a real constraint. Although demand certainly dropped in March and April due to the crisis, supply dropped even more, and has thus far kept home prices from declining. We expect that home-price growth will pick up over the summer due to insufficient supply levels.”

Dr. Fratantoni noted, “The market is supported by strong demand from first-time homebuyers, who represented 34% of home purchases in May. Millennial-driven demand will be a tailwind for the market for the next several years.”

“Although the real estate industry faced some very challenging circumstances over the last several months, we’re seeing signs of improvement and growth, and I’m hopeful the worst is behind us,” said NAR President Vince Malta, broker at Malta & Co., Inc.

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