Fewer homes than ever were for sale in January, but buyers bought what they could before mortgage rates rose further, according to red fin. Seasonally adjusted new listings fell 12.4% month over month, bringing the number of homes for sale to a record low of 2.6%. But demand persisted and sales rose 7.5%.
“We think the stock crisis will ease this summer as rates rise, but it may not go away in 2022,” Redfin CEO Glenn Kelman said on the earnings call. of Redfin’s fourth quarter. “We are well aware of the economic pressures on homebuyers, but so many people are still so desperate to move that sales for now are still primarily limited by inventory, not prices or even mortgage rates. “
The housing market is changing rapidly in the first months of 2022, with mortgage rates rising by 0.81 points between December 30 and February 17. Rising rates should slow competition somewhat between now and the summer.
“Homebuyers have no leverage to negotiate right now,” observes Dallas Redfin realtor Barbara Tidwell-Vincent. “Even the houses that need work are hyper competitive thanks to all the investors in the market. Most homes that come on the market are listed by people who need to sell – estate sales, major life changes, that sort of thing. With so few homes for sale, everything is getting multiple offers. I had a client offer $70,000 over the asking price, and we never even got a call back. It used to be that if you had good credit, a down payment, and all of your financial troubles as a result, you could get a house. Not anymore. Just to compete, you practically need a gym bag full of cash.
The national median January home sale price rose 14% from a year earlier to $376,200. Median selling prices rose year-over-year at all but one Redfin track in the 88 largest metropolitan areas. The only metro area to register a decline was Bridgeport, Connecticut, where home prices fell 2% from a year earlier after a 22% year-over-year increase in January 2021 The largest price increases were recorded in North Port, Florida (+32%); Austin, TX (+32%); and Phoenix, Arizona (+29%).
Seasonally adjusted home sales in January were up 7.5% from the previous month and 4% from a year earlier. Home sales fell from a year earlier in 66 of the 88 largest Redfin metropolitan areas. The largest sales declines were recorded in Fresno, California (-29%); Seattle, Washington (-22%); and San Francisco, California (-20%). The largest gains were recorded in Honolulu, Hawaii (+26%); Miami, Florida; (+10%) and Tulsa, Oklahoma (+10%).
Seasonally adjusted active listings — the number of all homes that were for sale at any time during the month — fell 18% year over year to an all-time low in January.
The 88 largest cities tracked by Redfin saw year-on-year declines in the number of seasonally-adjusted active listings of homes for sale. The largest year-over-year declines in active home supply in January occurred in Allentown, PA (-46%); Anaheim, CA (-42%); and San Jose, California (-41%).
The 12% year-over-year decline in seasonally adjusted new listings is the largest decline since May 2020. New listings fell from a year ago in 84 of the 88 largest metro areas. The only metro areas that saw more listings than a year earlier were Tulsa, Okla. (+2%); Las Vegas, Nevada (+2%); Indianapolis, Indiana (+1%); and Detroit, Michigan (+1%).
Despite rising prices, home sales that closed in January reflected a slightly less competitive housing market in previous months. Homes spent longer on the market and were less likely to sell above list price compared to mid-2021.
The typical house sold in January was under contract in 27 days – a week faster than a year earlier, when homes sold in a median of 34 days, and up 12 days from the record low of 15 days in June.
In January, 42% of homes sold above list price, down 14 percentage points from June’s record, but up 9 percentage points from a year earlier. The average sell-to-list price ratio in December was 100.4%, down from a record high of 102.6% in June, but up from 99.3% a year earlier .
Read the full report here.