We’re Seeing More Multiple Offers, Houses Selling Faster

Over the last few weeks, our agents have seen a rise in the number of deals with multiple offers. At the same time, many of our first-time home-buyers have told us they got into the market hoping to get 15% off any home they want, but they’re finding the houses they want are in demand.The good homes seem to be selling fast with the final sale prices at or near list prices.

To get to the bottom of what’s going on in the market, Dave Billings, our Seattle manager, took a look at the data.

More Redfin Offers Are In Multiple Offer Situations

March: 18 of our 127 offers (14%) were in multiple offer situations.

April*: 24 of our 112 offers (21%) were in multiple offer situations. For the multiple offer properties the average list price was $398,000. 63% (15 of 24) were under $400K.

Houses Are Selling Faster

Looking at the days on market (DOM) for recent sales we see it decreasing:

March: Median DOM for <$400K single family home sales was 49 days.
April: Median DOM for <$400K single family home sales was 37 days.

March: Median DOM for <$400K condo sales was 42 days.
April: Median DOM for <$400K condo sales was 49 days.

For single family homes, a 12 day drop in the median DOM over just 30 days is huge. New inventory is being snapped up quickly, while stale inventory is sitting on the market and rotting. Condos have typically been a house-alternative, but given seven day rise in median DOM for condos, it looks like buyers who can afford houses are choosing that path over condos.

Prices Down, Sale to List & Sales Up, Inventory Flat

We also have a few observations from when we were pulling the numbers for our home buying class slides [pdf].

In every neighborhood we monitor, both the average sold and list price dropped roughly $50K from March, while the sale-to-list percentage was up about two points in each area for both condos and single family homes.

The NWMLS King County inventory remained fairly flat at just under 40,000 listings, but the number of sales in the last month increased. As a result, the months of inventory dropped from roughly 16 to under 12; a significant drop in for one month.

Note: We pulled the April data on the 28th so it’s not for the whole month.

  • xay

    So is the activity mostly in lower priced houses then? Higher end homes are just sitting there waiting?

  • http://blog.redfin.com/blog/author/matt Matt

    We’ll post the April sales numbers soon which will give you the answer I think you’re looking for. But for April 50% of our offer activity was in the $175-$400k range.

  • seabuyer

    Spring effect. My favorites which are in the $400K-$500K price range are not showing the same behavior. I’m still counting that prices will keep dropping due to unemployment numbers and just overall recession.

  • Faith

    Matt,
    How does this March – April trend compare to 2008 and 2007 March – April figures. I think that is the real comparison: not consecutive months, but consecutive years right? Doesn’t April “always” fair better in home sales than March because the real estate cycle is seasonal? To use this data to make any assumptions about our economic situation, it seems that we need to look at other years, and not just other months.
    Thank you for your insight!

  • Dave Billings

    Faith:

    You’re right that there is always a seasonal trend with increasing home sales in the Spring. However, the last several months have seen extremely low sales volumes across the Puget Sound (total volume down 40% year over year). While we’re seeing an uptick in volume now, what’s unique is that buyers are all going for the same houses. After months of buyers, mostly first-time buyers, waiting for the right conditions, they’re coming back to find there is competition for the homes they want. Certainly not for every house, but for the best homes at the best prices.

    It wasn’t our intent to make any conclusions about the overall economy or the real estate market here in Seattle. Rather, it was to understand where these multiple offers were coming from. In general, I think we’ll see continued softening of prices overall, but in the sub-$400K market, I’m less sure that trend will apply.

    Regarding your question about comparing previous years, we weren’t tracking multiple offers this time last year, so I can’t provide insight into previous trends.

    Thanks for your comments,

    Dave Billings