Home Sales Soften as House Prices Reach Record Highs
With home prices continuing to soar and listings remaining low, it seems as though some buyers are backing away. According to the latest Redfin data, the median home sale price reached $358,766 last week to mark a new record high. What’s more, the figure is up 24% year over year. Meanwhile, the median asking price for newly listed homes was up 14% YOY at $363,450. However, this was actually down slightly from the $364,225 median observed earlier this month.
Although pending home sales for the week ending June 13th were still up 26% when compared to the same timeframe last year, demand has pulled back from earlier highs. In fact, pending sales have fallen by 9.8% since reaching an apparent peak in May. Nevertheless, 56% of homes the have gone under contract accepted offers within two weeks of hitting the market whereas only 43% saw such speed this time last year. Additionally, homes have recently sold in a median timeframe of 15 days, which is an all-time low. For comparison, the median a year earlier was 39 days.
Commenting on the trends observed in the latest report, Phoenix-based Redfin real estate agent John Biddle stated, “Offers no longer pour in the day a home hits the market, It has become more common for offers to come in at least a few days after a home is listed for sale. If this were three years ago, we’d marvel at how fast the market was, but it’s a clear slowdown from a few weeks ago.” As for why this may be occurring, Biddle explained, “Now that things are opening up again and the summer is almost here, people have other priorities, like going on vacation. Plus, many homebuyers are frustrated and tired of competing, so they’ve stepped back—for now at least.”
Elsewhere, Redfin Lead Economist Taylor Marr offered more analysis, noting, “Many measures of the housing market, such as pending home sales, mortgage applications and touring activity, showed some improvement this past week following the Memorial Day slump, but don’t call it a comeback. Seasonally adjusted homebuyer demand is unlikely to rebound to the levels we saw earlier in the spring.” Marr added, “While some buyers will find reprieve in less intense bidding wars this summer, others may be disappointed that homes remain hard to find.”
Ultimately, despite some frustrated would-be buyers pulling the plug on their plans, it’s clear that it’s still a seller’s market. However, the latest trends would suggest that some buyers aren’t willing to simply write blank checks. Instead, it looks as though demand may recede to a more manageable level and normalize along with the rest of American life. Of course, nothing is certain so we’ll have to wait and see where the market takes us from here.