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 by the 12th of each month, which analyzes our own databases to identify the major trends in listing inventory and prices as well as sales activity and consumer traffic. To receive these newsletters by email, just sign up! Here’s the October Roundup:
Howdy Redfinnians!
Here’s your latest roundup of news about home prices, which is mixed: August prices were down 0.2% from July, September sales volume was up 10% from August, and third-quarter foreclosures ticked up 4% compared to the second quarter. Interest rates are still way, way down, averaging 4.21%.
The hangover from the tax credit is over. Normal, regular real life isn’t so great just now, but it isn’t so bad either.
Everybody asks us how the robo-signing foreclosure freeze is affecting the market, and the truth is it’s not so far. We’ve had only one deal go south because the bank wanted the foreclosed property back. We expected to see fewer bank-owned listings activated, but in six of the eight markets we looked at over the past six weeks, the proportion of bank-owned listings being activated actually increased.
Meanwhile Redfin is rolling out this week a fancy new visualization of how listings are clustered across big cities. The clusters when clicked explode in this really cool way. And we’ve posted interactive versions of the forms used to estimate loan costs and close deals, as well as a room-by-room photographic guide to inspection problems, so you can really understand what you’re signing.
On Thursday, we’re opening Las Vegas and Austin for Redfin search. Overall our business is on pace to nearly double revenues again this year.
After Tax Credit Expires, Prices Finally Soften
As we predicted last month, the Case-Shiller data out this morning show the year’s first month-over-month, nationwide drop in home prices.
| Area | MoM Change | YoY Change | Date of Max | Change from Max | Prices Last at This Level in… |
# of Months of Increase |
| Phoenix | -1.3% | 0.4% | Jun-06 | -52.1% | May-01 | 0 |
| LA | -0.4% | 5.4% | Sep-06 | -35.9% | Dec-03 | 0 |
| San Diego | -0.6% | 6.9% | Nov-05 | -34.5% | May-03 | 0 |
| Bay Area | -0.3% | 7.8% | May-06 | -34.6% | Oct-02 | 0 |
| DC Area | 0.3% | 4.8% | May-06 | -25.0% | Jun-04 | 5 |
| Atlanta | -0.8% | -2.0% | Jul-07 | -20.1% | May-01 | 0 |
| Chicago | 0.4% | -2.9% | Sep-06 | -24.9% | Dec-02 | 5 |
| Boston | -0.3% | 1.5% | Sep-05 | -13.2% | Oct-03 | 0 |
| New York | 0.2% | 0.1% | Jun-06 | -18.8% | Jun-04 | 4 |
| Portland | -0.9% | -2.3% | Jul-07 | -21.2% | May-05 | 0 |
| Seattle | -0.8% | -2.4% | Jul-07 | -24.1% | Mar-05 | 0 |
| 20 City Index | -0.2% | 1.7% | Jul-06 | -28.1% | Oct-03 | 0 |
Only Washington, Chicago and New York posted gains, while San Diego dropped for the first time in 15 months. After reaching bottom in May 2009, Phoenix is in trouble again, losing 1.3% this month, and posting its third straight month of price declines.
September Sales Volume Ticks Up 10%
September sales volume increased 10% over August, but this was partly because August was so dreadful, and because the Realtor data includes a seasonal adjustment that boosts September numbers (according to our own, unadjusted figures for the market, Seattle, Bay Area and Washington DC sales volume actually dropped). Inventory declined from 12.0 months supply in August to 10.7 months in September.
Redfin’s Early-Stage Demand Up 10%, Offers Down 8%
Judging by Redfin’s own business, we have been cautiously optimistic, as more and more home-buyers signed up with Redfin to see homes or talk to our agents, a trend that continued unusually deep into the fall season, until just this last week. Early-stage demand over the past four weeks has been up 10%.
But everywhere except Southern California, Redfin closings were either flat or down, as the stand-off between buyers and sellers over price shows no signs of abating. Buyers look and look at homes, but only reluctantly make a move. Sellers unwilling to accept even-lower prices are now pulling some of the best properties off the market ’til spring. Negotiations are tough, and often unfruitful. One surprise from just last week: it’s practically November, and offers actually ticked up.
“It’s not enough right now for a listing price to be competitive,” said Redfin Bay Area market manager Catherine Jardine, one of my favorite comments from our local newsletters. “To get a sale, the price has to be compelling.”
Interest Rates Remain at Historic Lows: 4.21%
Interest rates meanwhile remain at freakish lows, and Monday’s speech by the Federal Reserve chairman suggested the government will try to keep ‘em low as long as it can. The latest numbers show a national average of 4.21% for the standard, 30-year fixed-rate mortgage, down from 4.37% a month ago.
This graph goes so low it weirds me out a little. But it has been weird so long that it doesn’t really seem weird anymore. That’s all the data for this month. Post a comment below and give us your take on the market. And thanks as always for your support.