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 July Roundup:
Welcome to Redfin’s straight-shooting, rip-roaring round-up of July’s real estate news!
While Redfin’s engineers launched a top-rated Android app, Redfin’s agents notched our best month ever, with happy customers and lots of homes bought and sold. July and August look weak but September looks better.
That can change fast. The debt ceiling makes every new home search — how did Robert Louis Stevenson describe his childhood? — like a picnic on the slopes of a volcano, and consumers are jumpy. This means that prices are going to be up-and-down.
Here’s a run-down of the key trends:
|May Prices||Up 1.0% vs. April, mostly seasonal|
|June Sales||Down 0.8% vs. May|
|July Rates||Flat vs. June at 4.52%|
|Redfin’s Early-Stage Demand||July new customers up 8% vs. June|
Demand is weak, but supply is weaker. Prices have stabilized, with Tuesday’s Case-Shiller numbers for May showing a second straight month of increases, this time by 1%. Call it a seasonal gain if you like but in February, we said prices would stop falling in March. Others disagreed. Prices stabilized in April.
Release the Kraken
Ten months after the robo-signing scandal broke, banks are still gun-shy about putting foreclosures up for sale. Nobody else wants to sell at these prices, and rents are rising. The market, having relied on the banks since 2008 to set prices and force sales, is now like Shaquille O’Neal, hand-fed by his assistant for so long that he almost forgot how to feed himself. By our own estimates new inventory in June was down 5% – 20% from last year, depending on where you look; new bank-owned listings declined by as much as 35%. This is why prices have firmed up. How long will it last?
Sales have been slow this summer. Home-buyers can’t get credit, and can’t find much good to buy. Would-be sellers are holding off ’til next year because they now think time is on their side. June sales were down 0.8% from May, but we’ve seen a surprising uptick in new demand just over the past two weeks, by about 8% compared to June. Could be a flash in the pan.
Cheap Rates, Tight Banks
Rates have stayed low at around 4.52% but what has changed just since May or so is tighter lending standards. A bank just asked one of Redfin’s customers to prove she’d get the same bonus from her boss through 2016. Sellers are jumping on cash deals even when buyers with financing are willing to pay $25,000 or $30,000 more.
The Rich Get Richer
Turn-key homes in centrally located neighborhoods with good schools are getting bid up $50,000 or even $100,000 this summer. Outlying areas are languishing. The drop hit the exurbs — rural places that became like suburbs in the last boom — the hardest in 2009, and here in 2011 those areas are still falling.
(Sorry about the mixed metaphors)
The market-by-market detail shows the biggest gains in the Bay Area because of the IPO frenzy, and recession-proof Washington DC. Seattle and Portland are doing pretty well too, but sales volume is so patchy up here right now it’s hard to tell if that’s a real trend:
|Market||MoM Change||YoY Change||Date of Max||Change from Max||Prices Last at This
|# of Months
|20 City Index||1.0%||-4.5%||Jul-06||-32.3%||Apr-03||2|
Case-Shiller Price Index Data for May 2011
That’s it! If you have any comments or questions about a particular area, leave a comment below and we’ll hook you up with the best Redfin agent to pitch in with more local insights. We won’t bother you later, either. It’s our job, so ask away. Have a great August, and thanks for your support!