What’s Going on With the Real Estate Market?
Has it seemed to you like demand is increasing in the real estate market? Consider a few data points…
In our Bay Area forums, one of the most popular threads — it came in at 6:44 a.m. on Monday — is about how crowded open houses were this weekend:
We’re used to running into one or two other couples or families if we’re in a well-priced house, but this weekend… we’ve never seen anything like it. There were 10 pairs of shoes outside of one home, another home had one couple or family in every single room while we were there.
Then an hour later, Marcella Branniff, who runs a customer support organization here at Redfin, mentioned in a meeting that she was touring open houses this weekend in Seattle and noticed that “every single one was packed.”
Meanwhile requests to tour properties and meet agents have remained at peak levels for Redfin in the first week of June, when normally we expect to see early-stage demand slacken from May.
Now of course, most of the folks in an open house are neighbors or looky-loos — and our clientele are notoriously careful to make a move — so it’s hard to figure out how much of this is real. This morning Redfin’s Adam Wiener queried our customer database to find out whether the competition was translating into more offers.
His findings: 71 of 108 (66%) offers that Redfin made in Southern California this May faced competition from other offers. We know that many other clients chose not to make offers after hearing about the competition, so the real numbers are in some ways even worse.
In a post-script to his email laying out the numbers, Adam mentioned that many of the agents in our partner program were “frantic,” a word I haven’t heard in years.
This isn’t to say we’re at the bottom of the real estate market. Because of the foreclosure moratorium that ended in March, a big new wave of foreclosed homes is scheduled to come online later this summer, on top of an interest-rate increase. And traffic on some large real estate websites has started to decline (though Redfin’s unique visitors in May still increased significantly over last month).
All the same, it seems like demand is up; some is seasonal, some is the result of the $8,000 first-time home-buyer credit, some is just tire-kickers; some is because banks are carefully titrating the supply of foreclosed homes to avoid flooding the market with supply. We don’t know how much demand will last beyond July or August.
So we thought we’d ask: what are you seeing out there?
Jim said:
I’ve seen reports of PENDING home sale increasing but I’m waiting for an increasing trend in CLOSED homes sales. In Colorado we are still experiencing a decreasing trend in CLOSED sales. I’ve heard Colorado will be the first one to rebound so keep your eye on our market.
June 10, 2009 11:13 AM
Galen said:
We are also seeing increased traffic and a lot of interest in seeing homes. I don’t expect sales to be off the charts, but they are staying steady.
I think you’re mixing up declining prices with declining sales. Loads of foreclosures can mean more sales (banks have to sell at some price!) even though they can mean lower prices.
June 10, 2009 12:08 PM
anonymous said:
My relatives and I are in the loan biz (5 bankers in my family. I work for a brokerage). The truth is, the banks are purposely withholding thousands of homes alone in socal, manipulating supply and demand in order to control home prices. Most of the reason is clear, however the banks internally claim that this is to slow the decline in sales. This is true as well, as it gives time for internal shareholders to bail out before the expected crash this summer, but the greater truth is simply manipulation.
June 10, 2009 1:30 PM
Glenn Kelman said:
@anonymous: I agree, but who can blame the banks for titrating supply to demand?
@Galen: yeah, I know what you mean, we’ve argued elsewhere that demand can increase without affecting prices because of the inventory in reserve.
@Jim: many folks in our forums have commented that homes are going under contract and then coming back on the market. Astute observation.
June 10, 2009 3:04 PM
Jason Quintero said:
As a Redfin partner REALTOR I have seen a large shift in the supply and demand of homes in Vacaville, Ca. About a year ago there were plenty of homes on the market and the buyers were just waiting and watching the prices drop very quickly. Now we have a shortage of homes on the market still with very affordable prices and low interest rates. Just about every home on the market now is getting multiple offers and bidding the prices up! Have we hit the bottom in the Vacaville, Ca. real estate market? I don’t think so since I know we have more REO properties coming on the market, but we might be close.
June 11, 2009 2:17 PM
Richard Stabile said:
Our market in Bergen County has picked up. Pending sales are up as normal for this time of year. We are basically back on a normal seasonal track. However it seemed to start a little late due to the credit crisis impacting our mortgage market.
June 13, 2009 7:36 PM
Bart said:
I have 2 houses for sale. One in Kentucky on a lake.(beautiful) @ $199,000. Has been for sale for two years. One showing! One in Texas @ $285,000. (Sun City) Listed two months, Four showings. No offers on either property. We have dropped prices on each with no effect. I don’t see market as gaining sales. There are real steals out there, and very little interest!
June 14, 2009 6:19 AM
Matt said:
People are getting out there and looking. I’ve seen a huge increase in the last 6 months.
June 15, 2009 11:09 PM
Case-Shiller Data for April 2009 Hits the Streets: Price Drops Not as Steep | Redfin Corporate Blog said:
[...] how busy Redfin and other brokers have been since April, our own take is that Case Shiller numbers won’t decline much for May or June, but it’s [...]
June 30, 2009 9:53 AM
San Francisco Kid@San Francisco, CA Homes for sale said:
Lets hope this real estate trend continues. I think we all need some good news at this point.
July 12, 2009 7:48 PM
Redfin’s July Newsletter… | Redfin Corporate Blog said:
[...] Declines to 9.4 Months Inventory has generally decreased, drastically in West Coast markets, where our agents often describe buyers as frantic. In California, we’ve taken clients on tours in late June where a dozen people are lined up to [...]
July 28, 2009 8:42 PM