Every month, Redfin publishes two newsletters on real estate prices. One, usually published on the last Tuesday of every month, is a Redfin Roundup, which synthesizes data collected by economists, government agencies and others to provide a complete portrait of what happened in the market over the past month. The other is Redfin Insider, usually published on the 11th or 12th of each month, which analyzes our own databases to identify — well ahead of anyone else — the major trends in listing inventory and prices as well as sales activity and consumer traffic. You can always see the full version of our newsletter right here on the blog, but if you’d like to receive a shorter update by email, just sign up!
Here’s your big August round-up on the real estate market! But first, a few morsels of Redfin news: we finally added school ratings and reviews throughout our website, and updated our iPhone app to find new listings as you zoom around the map.
June Prices Up, July Sales Volume Down
If you spend enough time searching Redfin you’ll notice the market is getting weak in the knees. The Case-Shiller numbers on June home prices came out this morning – prices are up 1.0% nationwide, and even more on the East Coast! — and nobody really cared.
| Metropolitan Statistical Area |
MoM Change | YoY Change | Date of Max | Change from Max | Prices Last at This Level in… |
Consec. Mos. of Increase |
| Phoenix | 0.0% | 6.0% | Jun-06 | -51.2% | Sep-01 | 0 |
| LA | 0.6% | 9.2% | Sep-06 | -35.9% | Dec-03 | 3 |
| San Diego | 0.4% | 11.2% | Nov-05 | -34.6% | May-03 | 14 |
| Bay Area | 0.3% | 14.3% | May-06 | -34.7% | Sep-02 | 4 |
| DC | 1.7% | 7.3% | May-06 | -26.0% | May-04 | 3 |
| Atlanta | 1.7% | 2.0% | Jul-07 | -19.6% | May-01 | 3 |
| Chicago | 2.5% | -0.1% | Sep-06 | -25.9% | Oct-02 | 3 |
| Boston | 1.2% | 3.4% | Sep-05 | -13.5% | Oct-03 | 3 |
| New York | 1.3% | 0.2% | Jun-06 | -20.0% | May-04 | 2 |
| Portland | 0.5% | 0.2% | Jul-07 | -20.3% | Jun-05 | 3 |
| Seattle | 0.0% | -1.8% | Jul-07 | -23.6% | Apr-05 | 4 |
| 20 City Index | 1.0% | 4.2% | Jul-06 | -28.4% | Oct-03 | 3 |
Case-Shiller Data for Key Markets, Non-Seasonally Adjusted
June is ancient history. The last of the sales driven by the federal tax credit closed in June. And what we already know about July is that prices were mixed, and sales volume was dreadful. Excluding new construction, the number of homes sold in July plunged 27% compared to June.
Don’t Panic!
But let’s not over-react! Sales volume will recover slightly in August. And while prices will likely decline this fall, especially in overheated areas of California and places like Seattle where prices may still have more ground to give, there aren’t enough new foreclosures in most of the U.S. to drive the kind of big drops we saw in 2008.
July foreclosure data was mixed, with early-stage delinquencies up, and actual foreclosures down: overall, July foreclosure activity increased slightly since June, but declined nearly 10% since July 2009. Banks are getting more aggressive about avoiding foreclosure, through refinancing or pre-approved short sales. The buyers who are out in the market are mostly complaining of nothing good to buy.
Forward-looking indicators are saw-toothed, not down. After a big June bounce, new-construction sales declined 12.4% in July, only half as much as they had gained. Based on signed contracts rather than closed deals, new-construction numbers are usually 60 days ahead of existing-home sales, suggesting the road ahead is bumpy. That’s not good but it isn’t a sleigh ride to Hades.
Redfin’s Business Mixed
And our business has been mixed, with new customers increasing through early August, followed by three weeks of only modest declines; normally the end of August sees big drops in early-stage demand. We saw a few Chicago customers cancel tours last week after the big sales drop hit the papers, but not elsewhere. Mostly the business has been steady. Our August revenues will be 15% higher than July’s.
Interest Rates Still Very Low
Nobody is worried about interest rates increasing significantly any time soon. Rates continued to decline on deflation fears, to a new historic low of 4.36% for a 30-year fixed-rate mortgage.
Houses will get cheaper and money will stay cheap. Cash investors will continue to snap up many of the best deals. The rest of us will buy when we need to move or maybe just because a house is really pretty.
And that’s it! Hope you have a good September, and thanks for your support. Questions or concerns, please just leave a comment below!
Best, Glenn