Redfin: West Coast Seeing Red

Mike Sorohan msorohan@mba.org

February 21, 2019

Redfin, Seattle, said while the January home price appreciation rate doubled from December, nearly a dozen West coast metros saw home price decreases, putting home buyers in those areas in a stronger position heading into the spring season.

The company's monthly report said U.S. home-sale prices increased by 2.9 percent in January from a year ago to a median of $285,900 across the metros it tracks. This represented and improvement from December's 1.5 percent increase, the smallest year-over-year price increase recorded since March 2012.

Home prices fell year over year in 10 of the 81 largest metro areas Redfin tracks, including San Francisco (-5.0%) and Portland, Ore. (-1.3%), a major shift for two markets that consistently posted strong price growth throughout most of 2018 and where prices haven't declined significantly since 2012. In Seattle, prices still grew last month, but barely, up just 0.6 percent year over year, and seem to be following a similar trajectory as their West Coast counterparts.

The report noted completed home sales nationally fell for the sixth consecutive month in January, down 7.6 percent from a year earlier. Home sales declined in 57 of the 81 largest metro areas that Redfin tracks. The number of homes newly listed for sale in January rose from a year earlier (4.4%), helping to push the total number of homes for sale up 6.3 percent, the biggest supply increase since May 2015.

"Things are looking good for buyers in 2019," said Redfin chief economist Daryl Fairweather. "The supply of homes for sale is increasing faster than it has in nearly four years. December was a rough month for home sales, but homeowners appear to be undeterred in the new year as more are listing their homes for sale."

Fairweather noted while the slowdown was anticipated in coastal cities such as San Francisco and Seattle, "we didn't know how sellers would react to a cooler market. It's encouraging to see that listings are up--it means that sellers aren't taking the ball and going home."

Redfin said homes remained on the market for an average of 57 days in January, an increase of six days from December but just one day from a year ago. The report said 16.7 percent of homes sold above list price in January, down by 1.4 percent from December and by 3.5 percent from a year ago.

"We expect the supply of homes for sale to increase, giving buyers more homes to buy, but not so many that prices drop broadly," said CEO Glenn Kelman.

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