The number of Redfin customers requesting tours rebounded in April while the number of buyers making offers posted modest growth
SEATTLE — The Redfin Housing Demand Index increased 9.2 percent from March to a seasonally adjusted level of 121 in April, according to Redfin (www.redfin.com), the next-generation real estate brokerage.
The Demand Index is based on thousands of Redfin customers requesting home tours and writing offers. A level of 100 represents the historical average for the three-year period from January 2013 to December 2015.
Although it has remained above its historical average all year, the Demand Index has shown strong variability, steadily decreasing from January to March before picking back up in April.
Compared to March, the seasonally adjusted number of buyers requesting tours was up 12.1 percent in April, and the seasonally adjusted number of buyers writing offers was up 6.9 percent. The growth in demand is in stark contrast with the ongoing shortage of inventory. Across the 15 metros covered by the Demand Index, there were 13.1 percent fewer homes for sale than the previous March, marking the 23rd consecutive month of year-over-year inventory declines.
Demand has been moving in fits and starts over the last six months, but is still generally above the 2013-2015 average activity level. With prices exceeding their 2006 peak and inventory at the lowest point in recent years, the question becomes whether this adverse environment will start to cool the market.
“We know two things heading into the summer selling season. One, home prices continue to leap forward. Two, homebuyers continue to jump into the market,” said Redfin chief economist Nela Richardson. “A pop of new listings only encourages more homebuyers to barge their way into this crowded and competitive, low-inventory market in order to take advantage of still-low mortgage rates. For these reasons, we expect prices to continue to grow above their three-year average for the remainder of the year.”
Seattle on Track to Become the Metro with the Least Inventory
Seattle is currently the third-most constrained for inventory, following Oakland and San Francisco, but has the largest population of the three metros. Seattle posted the largest year-over-year decrease in inventory, down 35 percent from last April. In the same period, the number of Redfin customers making offers climbed by 36.9 percent, an indication that the market is more competitive for buyers this year than it was last year.
“There’s no indication that this market is going to see a drastic increase in supply or a drop in demand, so waiting isn’t an option for a serious buyer,” said Redfin Seattle agent Kyle Moss. “People intent on purchasing this season should be discerning and focus on the one or two criteria that are most important to them, like commute time and/or schools. From there, carve out a list of homes that meet your qualifications and work alongside an agent who has experience winning offers in competitive situations to build and execute a competitive strategy that fits your budget.”
For additional national and local data and analysis, including metro-level charts and insights from real estate agents, please visit: https://www.redfin.com/blog/2017/05/redfin-housing-demand-index-ticks-back-up-as-prime-selling-season-commences.html
Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $40 billion in home sales through 2016.