Competition and speed of sales in the U.S. housing market reached all-time highs in May, as supply hit a record low, according to a report published Wednesday by Redfin.
More than a quarter of homes on the market sold for over their asking price nationally, with homes being sold in 37 days, on average, according to the report.
The highest priced markets are also still located on the coasts. In San Francisco, the median sale price, according to Redfin, was $1.29 million, up 3.2% from last month and 8.6% from last year. In San Jose, the median price for May was $983,500, up 2.4% percent from last month and 5.2% percent from last year, with Oakland clocking in at $700,000, a 2.9% increase from last month and 8.5% increase on last year. Some of these luxury markets also clocked some serious supply shortages, with supply in San Jose down 31%, and Seattle down 27.1%.
The median national price overall increased 6.8% year over year in May, reaching $288,000, while at the same time, sales increased 7.5% year-over-year, despite market shortages. The number of homes for sale dipped 10.9%, representing the 20th month of decline in inventory. Although May saw a 3% increase in new listings compared to last year, buyers are snapping up homes too quickly to leave a longer supply, leaving only a 2.7-month supply, a record low that’s well below the six-month supply mark that indicates a market at equilibrium.
Another record last month: The median sale-to-list price ratio, the ratio of the sale price to the asking price, which indicates whether homes are selling above or below asking, which hit 95.4%.
Chief Redfin economist Nela Richardson attributed these records to the robustness and depth of the market. “There is still a lot of momentum in home prices in many metros, not only on the coasts but also in places like Buffalo, Grand Rapids and Omaha,” Ms. Richardson said in a statement. “Strong local economic growth and burgeoning demand from older millennials are accelerating home-price growth in this very competitive, low-inventory pre-summer market.”
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Ms. Richardson also said she doubted that the Federal Reserve’s announcement to raise rates in the short term will affect buyer demand. “If anything, it may motivate buyers to make their purchases sooner rather than later,” she said.
Denver continues to perform well, and was for the third month, the fastest moving market, with houses sitting on the market for only six days. Median sales were up 18.9% in the city compared to last year . Other cities where homes sat for a median of less than 10 days include Seattle; Grand Rapids, Michigan;, Portland, Oregon and Omaha, Nebraska.
But despite this interior growth, in terms of competitive markets, West Coast prices still can’t be beat. In San Jose, California, 74.1% of homes sold above asking, with 70.9% in Oakland, 70.1% in San Francisco, 64.1% in Seattle, and 51.8% in Tacoma, Washington. Seattle also had the country’s largest growth in price, which rose 15.9% since last year to $510,000.
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