|April 26, 2016|
|Redfin Report: March marks the Fourth Consecutive Month of Falling Homebuyer Demand, Constricted by 11 Months of Inventory Declines|
The Redfin Housing Demand Index is the industry’s first and only measure of homebuyer activity prior to purchase, and is based on millions of visits to Redfin.com home-listing pages and thousands of Redfin customers requesting tours and writing offers in 15 major metro areas.
“Despite an increasing number of people searching for homes, fewer are taking the plunge and making offers due to a scarcity of homes for sale and a lot of competition from other buyers,” said Redfin chief economist Nela Richardson. “The result has been, and will likely continue to be, modest sales growth so far this year.”
Across the 15 metro areas measured by the Demand Index, home prices were up 4.7 percent in March from a year earlier as sales grew a modest 2.8 percent. The total number of homes for sale fell 1.7 percent, the 11th consecutive month of declines, even as new listings grew 7.7 percent.
The continually falling inventory makes it harder for buyers to find homes that fit the bill, which is one reason why fewer are making offers this year than last. Even though fewer buyers are making offers, those who do are likely to face competition over the rare desirable home that hits the market.
Last month, 62 percent of offers Redfin agents wrote faced bidding wars, a slight decrease from 63 percent a year ago. And 27 percent of homes sold for more than their asking price, up from 25 percent last year. The typical home stayed on the market for just 22 days, five days fewer than last year.
Bidding wars are heating up as 66 percent of Redfin offers faced competition and the typical home went under contract in just 17 days so far in April.
"Being successful in this market often requires losing out in a few bidding wars to learn what it takes to win a hot home in a desirable neighborhood,” said Redfin agent Niko Voutsinas in Chicago. “Once a buyer finds that special property that really stands out to them, they’re ready to move quickly and aggressively to win the bid. Finding and winning the right home is more about determining how much the home is worth to you and making an offer that reflects that, than focusing only on the ‘fair market value.’”
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