Monday, December 2, 2013

No Shutdown for the Housing Market in October

As we approach the holiday season, the housing market is showing stability and even resilience through the seasonal slowdown. The 19-market median sale price is up 15.3 percent year over year at $327,302. Month-over-month prices ticked down slightly with a 0.9 percent decrease. Home sales were up 0.6 percent over last year’s very strong October with 74,363 homes sold this month. Inventory continues to be the low point in the housing market, down 10.4 percent over last year, and down 5.5 percent from last month. As we said last week, shifting market conditions, such as reduced competition and falling mortgage rates, likely sustained demand in October.
October’s highlights:
  • Seven of 19 markets had month-over-month price gains in October and all 19 markets are up year over year.
  • Despite sturdy sales overall, home sales in markets on the West Coast showed weakness in October.
  • Inventory dropped into its seasonal decline with only two of 19 markets having a month-over-month inventory increase.
October 2013 Month-Over-
Month Change
Year-Over-
Year Change
Median Sale Price $327,302 -0.9% +15.3%
Total Homes Sold 74,363 -1.0% +0.6%
Total Homes For Sale 245,875 -5.5% -10.4%

Prices Strong and Stable

Prices showed unexpected resilience with a small 0.9 percent month-over-month decline compared to a 0.4 percent drop last year. Year-over-year prices are up a solid 15.3 percent across the 19 markets.
Median Sale Price Trend over last four years in 19 top U.S. Markets
Median sale price trend over last four years in 19 top U.S. housing markets.
Month-over-month price increases were seen in Las Vegas, Long Island, Philadelphia, Phoenix, Riverside, and San Francisco, with Sacramento unchanged. Year-over-year increases were seen in all 19 metros with Las Vegas, Sacramento, and Riverside leading the way with 30 percent year-over-year median sale price increases.

Sales Volume Solid, But West Sees Year-over-year Drop

The number of homes sold across the 19 markets showed some unexpected strength in light of the Federal Government shutdown. Home sales were up 0.6 percent year over year and down one percent month over month. Even with the large numbers of federal employees, Washington, D.C. had a two percent month-over-month increase in home sales.
Monthly sales volume in 19 top U.S. housing markets.
Monthly sales volume in 19 top U.S. housing markets.
While national sales were relatively strong, there was substantial weakness in home sales volume in the West. Las Vegas, Los Angeles, Phoenix, Portland, Riverside, Sacramento, San Diego, San Jose, and Ventura all had fewer homes sold in October 2013 compared to October 2012. The lack of inventory is taking its toll on the number of homes being sold.

Inventory Struggles to Find its Footing

While there were a number of promising housing market metrics in October for the housing market, inventory showed a sharply negative trend. The number of homes for sale in October was down 5.5 percent from September and inventory was down 10.4 percent year over year.
Homes for sale (inventory) at the end of the month in 19 top U.S. markets.
Homes for sale (inventory) at the end of the month in 19 top U.S. markets.

Outlook For Waning Months of 2013

If mortgage rates remain low, November and December may see stronger-than-normal sales as homebuyers try to get a leg up on spring competition. However, positive economic data has already pushed mortgage rates slightly higher in November, with daily rates for 30-year fixed rate mortgages rising from 4.1 percent to 4.39 percent. Continued rising rates and a lack of inventory could take the steam out of this late season demand.

About the Real-Time Home Price Tracker

Redfin’s monthly report on home prices, inventory levels and sales volume is an up-to-date, accurate portrait of the U.S. real estate market, published before other market reports. As a broker with access to dozens of Multiple Listing Services (MLSs) used by real estate agents to list properties and record sales, Redfin gets data within minutes of a sale, pending sale or listing activation, well before any government, media or analytics organization. Full data for October 2013 may be downloaded in a spreadsheet.

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