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 November Roundup:
Happy Holidays Redfinnians!
The latest figures on real estate prices came out this morning, with September prices declining everywhere except Washington DC and Las Vegas, by an average of .7% nationwide.
As we predicted, October sales volume also declined, by 2.2%. Interest rates ticked up just before Thanksgiving to 4.39%, and have stayed put since.
But after spending the whole year predicting a 2010 market drop, Redfin’s confidence in spring 2011 is growing. Our November and December revenues are 10% stronger than we expected.
Right before Thanksgiving, customers signing offers ticked up 3%. This is probably just an aberration but it’s very unusual this time of year.
There are no data to support any price increases over the next three months and longer term, everyone agrees the housing market is going to follow the overall economy, so we’re hardly ones to guess what will happen next.
Our round-up of all the real estate numbers on the web in November is below. Keep your fingers crossed. We have a lot to be grateful for in 2010.
Home Prices Decline .7% Nationwide
Let’s get right to it. The Case-Shiller index declined for the second straight month, and the news was bad almost everywhere:
|Area||MoM Change||YoY Change||Date of Max||Change from Max||Prices Last at This
|# of Months
|20 City Index||-0.7%||0.6%||Jul-06||-28.6%||Sep-03||2|
Since Case-Shiller indexes are based on three-month averages, momentum shifts tend to be lasting; price declines will almost certainly continue until January at least, and U.S. real estate prices may soon dip below the bottom we saw in the spring of 2009:
How much has changed? In June, 15 of 20 Case-Shiller markets had seen prices rise year-over-year, but as of September, only 5 of 20 cities had held on to year-over-year gains.
Sales Volume Declines 2.2%
As we predicted last month, October sales volume declined, by 2.2 percent since September and by 26% since October 2009, when sales were surging prior to the initial deadline for the first-time home-buyer tax credit. October new-home sales declined 8.1% since September, and 29% since the prior year.
Notwithstanding Redfin’s optimism about our own business, the downbeat new-home sale numbers are an accurate forward-looking indicator for U.S. real estate, because new-home sales figures are based on just-signed contracts, whereas the actual closings may take another 30 – 300 days.
Foreclosure Filings Down, But Banks Keep Selling the Properties They Already Have
We used to worry that a second wave of foreclosure filings was headed our way in 2011. Now we’re hopeful more of those bad loans might be modified. Foreclosure filings declined by 4% in October, mostly because the big banks had to hold up on some foreclosures due to the robo-signing scandal.
Interestingly, banks don’t have any second thoughts about selling properties they’ve already foreclosed: the number of bank-owned properties being put up for sale actually increased in October.
But as Joe Nocera argued in the best article about this whole mess, we are hopeful that the scandal will encourage banks to pursue loan modifications for more of the home-owners still hanging on. If distressed inventory continues a long-term decline, it’ll help the market recover. If on the other hand the scandal blows over, having only slowed down the foreclosure process, it’ll delay a recovery. The jury’s still out.
Interest Rates Tick Up
Many real estate agents keep hoping that an uptick in rates will jolt home-buyers into realizing that homes have become more affordable. The week before Thanksgiving, interest rates ticked up from 4.17% to 4.39%, but were steady last week.
We still don’t see much evidence that rates will take off, which means home-buyers will probably take their time until some pretty new homes hit the market in the spring.
And that’s the round-up for this month. Leave a comment below and give us your take. Stay warm this winter and thanks for all the support!