As if the official government data on soaring home prices wasn’t crazy enough, the latest monthly data from RedFin shows that in April, homes sold at their fastest pace on record with nearly half off-market within one week.
“There has been an ongoing debate at Redfin about whether fear of coronavirus infection was keeping homeowners from selling. With a third of American adults now fully vaccinated and still hardly any homes being listed for sale, we’re close to settling that debate,” said Redfin Chief Economist Daryl Fairweather.
(A quick note on the base effect in the housing market: at this time last year, pandemic stay-at-home orders halted homebuying and selling, which makes year-over-year comparisons unreliable for select housing metrics. As such, this report has been broken into two sections: metrics that are OK to compare to the same period in 2020, and metrics for which it makes more sense to compare to the same period in 2019.)
Metrics to compare to 2020:
- Homes that sold during the period were on the market for a median of 21 days, the shortest time on market since 2012. This was 16 days fewer than the same period in 2020.
- 45% of homes sold for more than their list price, an all-time high. This was 18 percentage points higher than the same period a year earlier.
- The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased 2.3 percentage points year over year to an all-time high of 101.0%, meaning the average home sold for 1% more than its asking price.
- 58% of homes that went under contract had an accepted offer within the first two weeks on the market. This was a new all-time high (Redfin’s data for this measure goes back to 2012).
- 46% of homes that went under contract had an accepted offer within one week of hitting the market, an all-time high.
- Meanwhile, with supply at record lows, demand remains near record highs thanks to fiscal stimulus, an exodus from rental units and near-record low mortgage rates.
Metrics to compare to 2019:
- Pending home sales were up 23% from the same period in 2019.
- New listings of homes for sale were down 10% from the same period in 2019.
- Active listings (the number of homes listed for sale at any point during the period) fell 47% from the same period in 2019 to a new all-time low.
Fairweather’s conclusion: “Homeowners are staying put because if they move and buy another home they will face a very competitive housing market as buyers, and they don’t need to sell to take advantage of record low mortgage rates. They can just refinance their current home. On top of that, builders are struggling to construct new homes given an ongoing lumber shortage. Without more homeowners listing, buyers are scrambling to compete for the limited number of homes on the market, which continues to drive prices up to new heights.”