Here’s the latest Redfin Real-Time Demand Pulse: a monthly analysis of tour and offer activity from thousands of homebuyers across 20 U.S. markets, months in advance of completed sales, and the only report in the industry that analyzes offer and tour data.
October 2012 Redfin Real-Time Demand Pulse (September data)
Redfin’s Real-Time Demand Pulse shows the American housing market continuing to gain strength, even as we head into the slower fall and winter season for home sales.
The number of Redfin clients touring homes and writing offers on homes in September 2012 bested September 2011 in every way. Offers were up 4.5% from a month earlier, compared to an increase of just 0.4% a year earlier. Tours increased 3.5% over the prior month, compared to an increase of just 1.7% in 2011.
We’ve been highlighting this growing strength in housing all year, even as other national economic measures have continued to stagnate, but now the momentum of the economy at large may finally be turning positive as well. Consumer confidence saw a nice bump in September and unemployment fell to its lowest point in over three years.
“As we have seen all year, demand among homebuyers has increased but that demand is more deep than it is broad,” said Redfin CEO Glenn Kelman. “Not every would-be home-buyer has the credit to buy a home, or enough equity to sell his old place. But, even when the number of touring homebuyers increases only modestly, these folks don’t hesitate to make an offer when the right home is for sale. This suggests to us that as rising prices draw more inventory onto the market, and as credit starts to ease, demand will likely increase in 2013 rather than decrease.”
Buyers Making Offers to Buy a Home
Early-stage home-buying demand can be measured in two components: how many people are touring homes they want to buy, and how many are making offers to buy those homes. Early September saw a predictable dip in offers around Labor Day, followed by a spike the following week. Although the week-to-week trends were similar in September 2011 and September 2012, this year saw an overall increase in offer volume from the month earlier, indicating a continued strength in homebuying despite a frustrating lack of homes listed for sale.
Offers performed much better month-over-month this year than last year, and the latest week’s data was on-par with the same week last year:
|Redfin Customers Signing Offers||2011||2012|
|September 2 – 29 vs. Four Weeks Prior||+0.4%||+4.5%|
|September 23 – 29 vs. Prior Week||+2.1%||+2.0%|
Continued strength in September offers points toward better-than-expected sales in October, which we expect will continue to turn in moderate gains over 2011. (Note: Redfin’s business is growing at a faster pace than the market as a whole.)
Buyers Touring Homes for Sale
While both buyers making offers and taking tours performed better than last year, the improvement in tours was slightly less intense.
Compared to the month before, tours rose 3.5% in September 2012. Last year tours rose about half as much, gaining 1.7% in September.
|Redfin Customers Requesting Tours||2011||2012|
|September 2 – 29 vs. Four Weeks Prior||+1.7%||+3.5%|
|September 23 – 29 vs. Prior Week||-3.9%||-0.9%|
Based on the sustained strength in tour and offer volume, it’s a safe bet that home sales will continue to outpace 2011 through the fall. This will likely mean continued pressure on prices, as an increasing number of buyers compete for a decreasing number of homes. Unfortunately for buyers, the typical fall housing slowdown may not see an end to the high number of multiple offers many markets have endured in the first half of the year.
The full Demand Pulse index data is available for download in a spreadsheet, where you can check out the trends going back almost four years.
Be on the lookout Thursday for the Redfin Real-Time Home Price Tracker, the industry’s earliest report on what happened to real estate prices around the nation in the month of September.