Competitive 2018 Spring for Homebuyers – Redfin

The typical home that sold in January found a buyer after 53 days on the market, six days faster than January 2017. The percentage of homes that sold above list (19.2%) and the average sale to list price ratio (97.8%) were both up slightly compared to January of last year, setting the stage for a spring market that could be even more competitive than last year.

“Sales volume is typically lowest in January, so while sales fell further than normal, it is not a major cause for concern,” said Redfin senior economist Taylor Marr. “Redfin agents in high-tax states reported that some buyers were hesitant in November and December given the uncertainty around tax reform, which passed in late December. This uncertainty contributed to the drop in January home sales.”

Marr says potential move-up buyers are now reassessing whether it makes sense to list their homes in the face of higher mortgage rates and less favorable tax treatment for their next home. Some buyers have determined lower deductions may be offset by other tax cuts, but those tax cuts won’t hit buyers’ paychecks for a couple months.

San Jose Homes Sold a Month Faster than Last Year

For yet another month, San Jose was the fastest and most competitive market in the country. The typical home found a buyer in 12 days, 30 days fewer than last January. San Jose homes sold for an average of 9 percent over the asking price, which is the highest sale-to-list price ratio Redfin has recorded in that metro area.

Other January Highlights

Competition

• San Jose, CA was the fastest market, with half of the homes that sold last month under contract in just 12 days, down from 42 days from a year earlier. Seattle, WA and Oakland, CA were the next fastest markets with 16 and 17 median days on market, followed by Denver, CO (19) and San Francisco, CA (23).
• The most competitive market in January was San Jose, CA where 75.5% of homes sold above list price, followed by 62.2% in Oakland, CA, 60% in San Francisco, CA, 41.7% in Seattle, WA, and 37.6% in Tacoma, WA.

Prices

• Memphis, TN had the nation’s highest price growth, rising 24.6% since last year to $162,000. San Francisco, CA had the second highest growth at 23.8%, followed by San Jose, CA (21.6%), Baton Rouge, LA (17.8%), and Seattle, WA (15.4%).
• Four metros saw price declines in January: Milwaukee, WI (-2.7%), Camden, NJ (-2.6%), Birmingham, AL (-2.3%), and Baltimore, MD (-1.8%).

Sales

• Only 11 out of 73 metros saw positive sales growth in January from last year. Salt Lake City, UT led the nation in year-over-year sales growth, up 11.9%, followed by Greenville, SC, up 11.8%. Kansas City, MO rounded out the top three with sales up 7.5% from a year ago.
• Michigan metro areas saw the largest declines in sales since last year, led by Detroit, MI where sales declined 29.7%. Home sales in Grand Rapids, MI and Warren, MI declined by 29.1% and 28.4%, respectively.

Inventory

• San Jose, CA had the largest decrease in overall inventory, falling 43.6% since last January. Rochester, NY (-37.5%), Buffalo, NY (-37.1%), and Atlanta, GA (-35.4%) also saw far fewer homes available on the market than a year ago.
• Only two metro areas had increases in the number of homes for sale in January: Baton Rouge, LA (16.7%) and Honolulu, HI (7.6%).

To read the full report, complete with data and charts, please visit the following link: 
https://www.redfin.com/blog/2018/02/market-tracker-january-2018.html