Home Sales are Beginning to Stall as Buyers Hit Their Limit

56644 Little River Court, Bend, OR 97707
Presented by Jenn Schaake | Offered at $1,850,000 | MLS# 220119613

From housingwire.com

Home sales fell 1.2% from May to June, the largest drop at this time of year on record since at least 2012, according to a new Redfin study released this week.

The national median home-sale price hit a record high of $386,888, up 25% year over year, but a slight decline from the record of 26% in May. The number of homes for sale fell 28% year over year from 2020, and the typical home sold in just 14 days — a record low and, down from 39 days in June 2020.

Homes sold for their highest prices and at their fastest pace on record, but measures for market speed and competition seem to be at or near peak levels for this year, said Daryl Fairweather, Redfin’s chief economist.

“In June we entered a new phase of the housing market,” Fairweather said. “Home sales are starting to stall because prices have increased beyond what many buyers can afford. This summer I expect home prices to stabilize as more homeowners list their homes, realizing they likely won’t fetch a higher price by waiting longer to sell.”

Fifty-six percent of homes sold above their list price — another record high, up from 27% a year ago. And the average sale-to-list ratio hit 102.6% in June, meaning homes are selling on average 2.6% above asking price.

Regionally, seasonally adjusted active listings fell 28% year over year to their lowest level on record, and only two of the 85 largest metros tracked by Redfin posted a year-over-year increase in the number of seasonally adjusted active listings of homes for sale: Milwaukee (+4%) and New York (+1%). The biggest year-over-year declines in active housing supply in June were in Baton Rouge, Louisiana (-57%), North Port, Florida (-52%) and Greensboro, North Carolina (-46%).

Median sale prices, however, increased from a year earlier in all of Redfin’s 85 largest markets. The largest price increase was in Austin, Texas (+43%), where a typical three-bedroom, two-bathroom suburban home sold for about $485,000 last month — up from about $340,000 a year earlier, according to Jennifer Hoffer, Redfin’s market manager in Austin.

“Home price growth over the last few months in Austin has been astronomical,” Hoffer said. “There has been a perfect storm of factors driving up price here with tech firms like Tesla, Amazon and Oracle announcing expansions in Austin, celebrities relocating here, and overall a whole lot of really great press for the area.”

The next biggest price increases were seen in Lake County, Illinois (+31%) and Phoenix (+30%). The smallest price increase was posted in San Francisco, where prices were up only 2.6% from a year ago.

Finally, new listings fell from a year ago in 15 of the 85 largest metro areas. The biggest declines were in Baton Rouge, Louisiana (-51%), Allentown, Pennsylvania (47%) and St. Louis, Missouri (-41%). New listings rose the most from a year ago in San Jose, California (+38%), Tacoma, Washington (+35%) and Milwaukee, Wisconsin (+32%).

Full article at housingwire.com

More Homes, Fewer Buyers: The U.S. Housing Market Is Starting to Stabilize

1750 SW Westpoint Ct, Portland, OR 97201
Presented by Dennis Coxen | Offered at $1,839,000 | MLS# 21229026

From Mansion Global

The lopsided housing market in the U.S. is starting to right itself, albeit slowly, according to a report Friday from Redfin.

New listings for homes rose 4% in the four weeks ending July 4, compared to the same time last year, the data found. They were also up 3% from the same four weeks in 2019, marking the first time new listings exceeded the 2019 levels since the beginning of the year.

At the same time, pending home sales had their smallest year-over-year jump —17%—in close to a year, the data showed. Pending sales were also down 6% compared to the four-week period ending May 30.

“Many buyers have backed away from the housing market and are waiting until more and better homes are listed,” Daryl Fairweather, Redfin’s chief economist, said in the report. “Buyers don’t have the same sense of urgency that they did at the beginning of the year.”

That’s because mortgage rates have dropped to below 3%, with no immediate signs of rising, and asking prices are starting to stabilize, she added.

“With more new listings starting to come on the market, buyers who threw in the towel may want to look again because the market is tilting more in their favor,” Ms. Fairweather continued.

But make no mistake, for now, it’s still a seller’s market.

The median home price reached yet another record high, hitting $364,430 for the four weeks ending July 4, a year-over-year increase of 22%, according to the report. Asking prices rose 12%, compared to the same four weeks in 2020.

The median home spent 15 days on the market for the four-week period, down from 39 days at the same time last year, Redfin found. That number has been flat for the past month.

In addition, 55% of homes sold for above their asking price, the data showed. That’s a year-over-year increase of 27%, the highest jump since Redfin began tracking the data in 2012.

Full article on Mansion Global

Contract Signings Surge as Home Buyers Remain Eager

16440 Fair Mile Road, Sisters, OR 97759
Listed by Patty Cordoni & Suzanne Carvlin | Offered at $1,900,000 | MLS# 220118039

From REALTOR® Magazine

Pending home sales bounced back strongly in May and surged to the highest reading for the month of May since 2005, the National Association of REALTORS® reported Wednesday.

NAR’s Pending Home Sales Index, a forward-looking indicator of home sales based on contract signings, climbed 8% in May compared to April. Contract signings are up 13.1% compared to a year earlier.

“May’s strong increase in transactions—following April’s decline, as well as a sudden erosion in home affordability—was indeed a surprise,” says Lawrence Yun, NAR’s chief economist. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.”

Buyers are shaking off record-high home prices and low inventories of homes for sale. Housing inventories are down 20.6% compared to a year ago. Also, the median existing-home price for all housing types posted a record year-over-year increase of 23.6% in May, according to NAR data. The median home price was $350,300.

“While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun says. “More market listings will appear in the second half of 2021, in part from the winding down of the federal mortgage forbearance program and from more home building.”

Yun also predicts that home price growth will gradually moderate as more homes are listed on the market. “But a broad and prolonged decline in prices is unlikely,” Yun says. “However, if a reduction occurs in some markets, home buyers will view the lower home price as a second chance opportunity to get into the market after being outbid in previous multiple-bid market conditions.”

All four major regions of the U.S. posted month-over-month and year-over-year gains in contract signings last month, NAR reported. The Northeast increased 15.5% in May, a 54.6% climb from 2020. In the Midwest, sales increased 6.7% monthly and 7.8% year over year. The South reported a 4.9% increase, 6.1% increase year over year. The West increased 10.9%, up 12.5% year over year.

Full article on REALTOR® Magazine

Demand for Vacation Homes Is Still Strong

21690 Butte Ranch Road, Bend, OR 97702
Presented by Mark Garcia | Offered at $1,999,999 | MLS# 220116465

From Keeping Current Matters

The pandemic created a tremendous interest in vacation homes across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a migration away from cities and into counties with more vacation destinations.

The 2021 Vacation Home Counties Report from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where “vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock” and compares that data to the overall residential market.

Their findings show:

  • Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
  • Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
  • Home prices rose more in vacation home counties – the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.

This coincides with data released by Zelman & Associates on the increase in sales of second homes throughout the country last year.

As the data above shows, there is still high demand for second getaway homes in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing low supply and high demand will continue to provide those sellers with a good return on their investment.

Full article on Keeping Current Matters

Faster, Stronger: May was a Record Month for U.S. Real Estate

1825 SW Vista Ave, Portland, OR 97201
Presented by Tami Ferrey | Offered at $2,900,000 | MLS# 21061105

From Mansion Global

The median home price, the speed of sales and premiums—a sign of bidding wars—hit all-time highs last month, according to Redfin.

The soaring housing demand, cutthroat competition and overall zealous market conditions seen across the U.S. in the past year built to a record-breaking month in May.

The national median home-sale price reached a record high of $377,200 last month, up a whopping 26% year over year, the highest annual jump recorded, according to a report Thursday from Redfin.

But they weren’t the only records set. The typical home sold in just 16 days, a record low and down from 38 days in May 2020; 54% of homes sold above their list price, a record high, up from 26% a year ago; and the number of homes for sale fell to a record low, down 27% from 2020.

It’s crucial to note though, in May 2020 the country was still gripped by pandemic-driven lockdowns, which drastically slowed the property market, “meaning the year-over-year trends for home prices, pending sales, closed sales and new listings are exaggerated,” the online property portal and brokerage said.

But with buyers and sellers now frequently vaccinated and gradually returning to pre-pandemic living, May is likely to have been the peak of “the blazing-hot pandemic housing market,” Redfin lead economist Taylor Marr, said in the report. “Sellers are still squarely in the drivers’ seat, but buyers have hit a limit on their willingness to pay. The affordability boost from low mortgage rates has been offset by high home price growth.”

The largest property price gains were recorded in the most popular destinations for migrating Americans, a separate report Thursday from Redfin said.

Nationwide, 31.4% of Redfin.com users looked to move to a different metro area in April and May, up from 27% at the same time last year.

Topping the list as the most popular spots for movers were Phoenix; Las Vegas; Sacramento, California; Austin, Texas; and Miami.

In Phoenix, the top destination for relocators, buyers from California, Oregon, Washington and the Midwest “are flooding the market, depleting inventory and pushing up prices,” Vincent Shook, a Redfin agent in Phoenix, said in the report.

“So many people can work remotely from anywhere in the country, so they started looking at Arizona versus a place like Los Angeles or Seattle and thinking, ‘why stay in such a high-priced market when I can get a larger home in Phoenix for a lower price?’” Mr. Shook said.

Those buyers, with higher salaries and the ability to make offers over the listing price, are causing almost every home to sell for more than its asking price, he added.

Sales prices in Phoenix jumped 33.3% annually in May to $400,000, the second-highest annual price jump across the 88 metro areas the report tracks and well above the national figure of 26%.

Sacramento logged the fifth-largest price increase with annual price gains of 29.3% leaving the median sale price at $550,000.

But Austin topped the list for soaring prices, where sale prices skyrocketed 42.4% year over year in May to $470,000.

Full article on Mansion Global

Homeowners Got $2 Trillion Richer During the First Three Months of the Year

13501 SW Riggs Road, Powell Butte, OR 97753
Presented by Perry Cross | Offered at $3,590,000 | MLS# 220114992

From cnbc.com

Homeowners are getting richer and richer as prices keep soaring – and the numbers are staggering.

Those with mortgages — about 62% of all properties — saw their equity jump by 20% in the first quarter from a year earlier, according to CoreLogic. This represents a collective cash gain of close to $2 trillion. Per borrower, the average gain was $33,400.

The massive gain is thanks to soaring home prices, which CoreLogic said were up over 11% in March, the end of the quarter, from a year earlier. That’s the sharpest gain since 2006. Prices rose an even stronger 13% in April.

High demand for homes spurred by the coronavirus pandemic amid an already low supply caused bidding wars in markets across the nation. Record-low mortgage rates for much of last year only added to the buying frenzy and helped fuel the price gains.

“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” said Frank Martell, president and CEO of CoreLogic. “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.”

As of June 1, there were still just over 2 million homeowners in Covid-related mortgage bailout programs, according to the Black Knight real estate data company. As these plans begin to expire, having home equity will help those in trouble. They can still sell and get out with a potential profit if they have to.

“This reduces the likelihood for a large numbers of distressed sales of homeowners to emerge from forbearance later in the year,” CoreLogic chief economist Frank Nothaft said, adding that the average homeowner now has about $216,000 in equity.

The share of borrowers in a negative equity position, owing more on their mortgages than their homes are worth, consequently dropped. From the fourth quarter of 2020 to the first quarter of 2021, the total number of mortgaged homes in negative equity decreased by 7% to 1.4 million homes, or 2.6% of all mortgaged properties. Annually, the number of underwater homes dropped by 24%.

Home values are expected to cool off in coming months because buyers are already hitting an affordability wall. Sales have begun to slow, and price drops usually follow.

Home prices are not, however, expected to crash, since there is still strong demand for housing, and the demographics support that going forward. As prices moderate, buyers will come back. Unlike the last time home prices crashed, today’s mortgage underwriting is far more stringent.

Full article at cnbc.com

Buyers are Realistic About Housing Shortage Challenges

25800 SW Petes Mountain Rd, West Linn, OR 97068
Presented by Kristen Kohnstamm | Offered at $2,895,000 | MLS# 21113135

From REALTOR® Magazine

House hunters are realizing they may need to expand their timelines to find a home. While they’re still anxious to buy, they are getting the messages about the competitive housing market and fierce bidding wars that they realize may delay their plans.

The share of consumers who hoped to buy a home in the next six months plummeted from 34% a year ago to 21% this year, according to a newly released homebuyer flash survey conducted by Point2 Homes, an online real estate marketplace.

But it’s not from a lack of eagerness: 50% of respondents said they were determined to buy as soon as they find the right property.

Concerns about housing shortages are increasing. But fewer respondents this year appear worried about their personal financial stability.

As such, the higher home prices aren’t scaring them away. Fifty-one percent of the more than 2,600 respondents said they were confident that the steep price hikes would not be a problem in their house hunt. On the other hand, 45% of consumers surveyed said they did not believe they’ll be able to keep up with the price hikes.

Also, buyers are still showing an interest in virtual home tours to shop for homes, but that interest does seem to be waning in favor of a return to in-person viewings. Interest in online pictures declined, while 11% of respondents expressed an interest in going to showing this year compared to just 4% last year, according to the Point2 Homes survey.

“Home seekers all across the U.S. remain positive about the home buying process, and seem more determined than ever to find the perfect home,” the report says. “Although the competition is fiercer than it has been in the past, many Americans are keeping their eyes on the market and are willing to play by the new rules—which imply more preparation, higher offers, and going through bidding wars without losing hope.”

Full article on REALTOR® Magazine

Mortgage Interest Rates Stay Below 3% Yet Again

20240 Rock Canyon Road, Bend, OR 97703
Presented by Ruiz & Grandlund Real Estate Group | Offered at $3,495,000 | MLS# 220115644

From Forbes

We are nearly at the halfway point of the year and all the predictions from the end of last year suggesting that interest rates would steadily increase and never again see the low rates of the pandemic have only just barely proven true. As of this week they have stayed below 3% for five out of the last six weeks for 30-year fixed-rate loans, reaching 2.95% based on the Freddie Mac weekly report. When we closed out 2020, rates were at 2.67% which was just one basis point higher than their lowest level on record from a few weeks earlier.

Applications to purchase a home have increased slightly over the past few weeks but buyers continue to be held back by a lack of affordable inventory. A survey of over 400 metropolitan areas in the U.S. conducted by Redfin showed the number of homes that sold over list price had nudged over 50% for the first time during the four-week period ending May 16. Other record highs the survey revealed include: 45% of homes had an offer accepted within one week of going on the market and the average sale-to-list price ratio reached 101.7%. The median sales price for homes also reached a record high of $352,975.

As the Mortgage Banking Association reports, purchase applications have increased slightly the past few weeks, even though they are lower than they were a year ago. “Purchase applications increased for the second time in three weeks, rebounding after a rather weak April with mostly weekly declines,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “While purchase activity was around 4% lower than a year ago, the comparison is to last spring’s large upswing in activity as pandemic-related lockdowns lifted.”

This decline of 4% is still telling since it shows how strong the current demand is for it to only be a minimal decrease compared to a time period when pent up demand suddenly hit the market.

Activity for the upcoming summer season will be a competitive market for buyers while sellers can expect to receive record prices for their homes.

Full article on Forbes

Home Prices Rapidly Climbing Toward $375,000

8336 NW Thompson Rd, Portland, OR 97229
Presented by Jason Mendell & Braden Fridell | Offered at $1,264,950 | MLS# 21649654

From housingwire.com

Nearly 50% of all homes sold above listing price

National median home prices reached $370,528 for the month of April, a 22% increase year over year and a new record, according to a recent study from Redfin.

The number of homes for sale also sank to a record-low average of only 19 days on the market. And 49% of homes sold for above asking price — a record high.

The numbers are a bit exaggerated, per Redfin Chief Economist Daryl Fairweather, due to the COVID-19 pandemic slowing homebuying and selling in April 2020 and skewing the numbers. But the fact remains, she said, that low inventory is going to keep prices high.

“There simply aren’t enough homes for sale in America for everyone with the desire and the means to buy one right now,” Fairweather said. “Until new construction takes off — over the course of years, not months — home prices will continue to increase. This housing boom is nowhere close to over.”

With an aforementioned 49% of April homes already selling above asking price, it’s likely May and June will report record highs as well, Fairweather said.

“To put the scarcity of housing into context, there is plenty of room for supply to increase and demand to taper off, and we would still find ourselves in a historically strong seller’s market,” Fairweather said.

Also of note was April’s average sale-to-list price ratio, which went above 100% to a record high of 101.6%.

“This measure also typically peaks in June, so the next two months may also hit record highs if the market continues to follow a typical seasonal pattern into summer,” Fairweather said.

Regional numbers also reflect the enormous difference in house sales from April 2020.

The number of homes sold in April was up 34% from a year earlier, but only 8% from the same time in 2019. The only metro area that saw home sales decline was Rochester, New York (-3%). The largest gains in sales were in places that had the most abrupt slowdown of home sales in April 2020, including San Francisco (up 184%) and San Jose, California (up 150%) and Miami, Florida (up 120%).

Median home prices increased from a year earlier in all of the 85 largest metro areas Redfin tracks. The smallest increase was in Honolulu, Hawaii, where prices went up 0.2% from a year ago. The largest home price increases were in Austin, (up 42%), Oxnard, California (up 26%) and Miami (+26%).

Indianapolis, specifically, saw the largest decline in days homes spent for sale over the past year. In April 2020, homes were selling in 10 days, on average, in the midwestern city. Now, homes in Indianapolis are selling in four days, on average, underlining the trend of homebuyers seeking lots in states with less income tax and more overall space.

“I’m helping buyers understand the current market by advising them that it’s no longer unusual for a home to sell for up to $50,000 above asking price,” said Andrea Ratcliff, an Indianapolis-based Redfin agent. “Builders have waiting lists of at least a year and people are hesitant to sell their homes because there are so few options available for them to buy.”

Approximately half of all homes in Denver, Seattle, Portland, Oregon and Omaha, Nebraska sold in five days, Redfin reported.

Full article at housingwire.com

Your House Could Be the Oasis in an Inventory Desert

112 Woodland Rd, Goldendale, WA 98620
Presented by Dennis Coxen | Offered at $2,200,000 | MLS# 20644070

From Keeping Current Matters

Homebuyers are flooding the housing market right now to take advantage of record-low mortgage rates. Many have a sense of urgency to find a home soon since experts forecast a steady rise in both rates and home prices this year and next. As a result, buyer demand greatly outweighs the current housing supply. Here’s how the shortage of houses for sale sets yours up to be the oasis in an inventory desert.

According to the National Association of Realtors (NAR), today’s housing inventory sits at an incredibly low 2.1-month supply, far below the 6-month mark for a neutral market. Inventory of single-family homes a year ago was already very low, and as you can see in the graph below, this year’s levels are even lower:

Due to these market conditions, today’s buyers frequently enter fierce bidding wars while trying to purchase a home. This in turn drives up home prices and gives sellers incredible leverage in the negotiation process, two big wins if you’re going to sell your house this year.

Full article on Keeping Current Matters