Overall Inventory Down 3.2% in Seventh-Straight Month of Declines
According to Redfin, U.S. home prices increased 4.8 percent year over year in April 2016.
April marked the third consecutive month that home-price growth fell below the 12-month average of 5.6 percent. Home sales increased 2.5 percent and inventory fell 3.2 percent year over year in April, the seventh-straight month of declines.
What stood out in April was a 1.1 percent year-over-year decline in new listings, the first such drop since August 2014. The retreat in listings growth was widespread, with nearly two-thirds of markets Redfin tracks seeing fewer new listings than the same time last year. The largest declines were concentrated in the Northeast, with Boston, New York and Philadelphia seeing year-over-year declines of more than 10 percent.
"Trade-up buyers seem to be losing their mojo heading into the heart of the spring selling season," said Redfin chief economist Nela Richardson. "Repeat buyers tend to list early because they are most often also looking for another home to buy in the near future. A slowdown in new listings reflects a lack of confidence on the part of the homeowner that they can find a desirable home to purchase. This triggers a domino effect down the supply chain that leads to lower sales in tight markets. West coast cities like Denver, Portland and Seattle were prime examples of this in April."
Home sales in many Western markets saw a year-over-year decline in April. In hot markets like Seattle, Portland and Denver, overall inventory remains at historic lows and, while demand has continued to increase, new listings have not. This has led to the most competitive conditions Redfin has tracked in these markets, with homes selling faster than anywhere else and with the lowest months of supply of any market in April. Bidding wars reached their highest level on record in Seattle in April, when 77.9 percent of offers written by Redfin agents faced competition, while the bidding war rate in Portland surged 68.5 percent, and in Denver it reached 66.7 percent. But even with strong buyer demand, the lack of growth in new listings has constrained sales in these markets.
Despite the sales slowdown in Western markets, sales in all other regions were up year over year, with the Northeast region seeing the highest growth.
Local U.S. Market Insights in April
Providence, R.I., where the median sale price increased 17.6% year over year to $226,000, led the country in price growth.
In Tennessee, both Memphis (+32.6%) and Nashville (+31.1%) saw the highest rates of home sales growth in the country.
San Francisco saw a 31.1% year-over-year increase in inventory, the largest boost seen there since February 2010.
Portland and Seattle were the fastest markets, with half of all new listings selling in 8 days or less in both metros. Denver was the third fastest where the median days on market was 10.