SEATTLE-Redfin's recent Real-Time Demand Pulse, which analyzes home tour and offer data, showed that the number of Redfin customers touring homes and making offers dipped in both May and June this year, falling more than they did during same period last year. According to the firm, the most likely reason for the decrease in demand is a sudden spike in interest rates in June.
Redfin is seeing two kinds of reactions among homebuyers. The first group consists of homebuyers just getting started in the process of purchasing a home. This group seemed to step back, which accounts for the decline in tours and offers in the first few weeks of June, says Redfin. The second group of buyers, already further along in the homebuying process, tended to accelerate in an effort to lock in a still historically low rate. As a result, offers were up by 1.2% in the final week of June.
Key findings from the report included:
*The number of customers touring homes fell 1.9% from May to June, compared to a 1.5% increase between May and June in 2012.
*Home offers decreased 5% from May to June, a slightly larger decline than last year's 3.2% drop.
*During the last week of June, home tours were down 2.7% week over week, compared to a 2.3% increase in the last week of June 2012.
*In the last week of June, home offers increased 1.2% week over week, compared to a 2.3% week-over-week increase during the same period last year.
According to Redfin's Real-Time Home Price ticker for June 2013, home prices had increased 19% year over year across 19 major US markets. Strong price increases continue to support growing inventory, which increased for the third consecutive month.
However, home sales faltered in June, with a minor year-over-year gain, and a loss from May, says the firm. While still firmly in seller's territory, the June numbers indicate a trend toward a more balanced market.
Home price findings:
Market-Specific Highlights and Lowlights include:
Home prices:
* Home prices in all 19 markets were up year over year and month over month with Sacramento, San Francisco and Las Vegas having the highest year-over-year price increases, gaining 38%, 34%, and 33%, respectively.
* Philadelphia saw the smallest gain in prices, with a 3.1% increase year over year.
Inventory:
*Chicago and Phoenix were again the only markets where inventory came in higher than it was a year earlier, with Chicago up 2.3% and Phoenix up 10%.
* Sacramento saw the largest year-over-year inventory decline with a 48.3% drop. Boston followed close behind with a 45% drop.
* Cities with the largest monthly gains in inventory included Ventura (11%), Sacramento (10.4%), Denver (7.8%), Seattle (7.4%) and Los Angeles (6.5%).
* Las Vegas, Philadelphia and Phoenix were the only three markets where inventory declined in June.
Sales volume:
*Ten markets saw sales increase from last year, four fewer than in May. Just six markets saw an increase in monthly sales volume.
* New York's Long Island again posted the largest yearly sales volume increase, with home sales up 66.9% from June 2012.
* Long Island also had the largest monthly increase in sales volume, up 15.6% from May.
* California's Inland Empire saw the most drastic year-over-year decline in sales volume, with a 16.7% drop from June 2012.
*Phoenix had the sharpest month-over-month decline in sales volume, down 15.8% from May.
“ZipRealty's latest report provides our first real glimpse into the health of real estate market since mortgage interest rates began to rise in mid-June,” says CEO and president Lanny Baker, of Emeryville, CA-based ZipRealty Inc. “During the third week of June, mortgage rates posted their largest one-week increase in more than a quarter-century and rates are now 1% higher than they were a month earlier. However, that hasn't mattered much in terms of home sales prices and transaction activity,” he says.
“The median home sales price in the 24 markets we analyzed was over $280,000, up $10,000 from May 2013 and 16% higher than May 2012. Sales prices in June hovered above 99% of list prices on average, just as we've seen in prior months. Median days on market for homes sold in June decreased by another two days compared to May 2013 − and at 27 days stands nearly two weeks shorter than last June. These indicators point to a market that appears to be relatively undisturbed by the recent rise in interest rates − as of yet,” he shares.
Other interesting highlights from the ZipRealty report include:
*Sacramento has shot ahead of the SF Bay Area in percentage home price increases, jumping 42% on a year-over-year basis as of June 30, while Bay Area prices increased 38%.
*The West Coast continues to dominate in terms of home price growth: The Bay Area, Las Vegas, Los Angeles and San Diego followed Sacramento in terms of price gains.
*The number of new home listings in Denver, Seattle and Portland increased substantially, presenting more opportunities to buy for interested home buyers. Denver listings increased 23% year-over-year as of June 20, while Seattle and Portland both saw 20% increases in new listings.
Check out more recent GlobeSt.com stories on the subject:
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
