Price, Competition, Speed of Sale Set Housing Market Records

Housing market metrics for the month ending May 2 set several new records. Experts say things will need to become more balanced before many mid-priced-home owners will feel comfortable listing their homes—right now, the risk of being unable to find a new home looms large, they say.

(As we reported earlier, homebuying pessimism just hit record highs.)

A record-high 21% year-over-year growth rate in the median home-sale price hit $348,500, according to a new report from Redfin.com.

High-end homes are being sold more now than a year ago. That, not the sale of mid-priced homes, is the primary contributor to the large growth rate, according to Redfin's research team.

Here is what Redfin's Chief Economist Daryl Fairweather has to say about the latest data:

"Right now we are seeing a substantial increase in home prices, which could be a precursor to more widespread inflation throughout the economy. Lumber prices are surging, which has driven up prices of new homes and indirectly drives up prices of existing homes. As states lift their pandemic restrictions, we will likely see more shortages and price increases on everything from gasoline to hotel stays and food. These price increases will likely be short-lived but could cut into homebuyers' budgets and ease competition enough for the housing market to become more balanced. A more balanced market could encourage more move-up homeowners to finally sell because they won't be so fearful about being able to find and compete for a home to buy."

Redfin's analyst Tim Ellis summed up the April data with some key takeaways (note, some metrics are compared with 2019 rather than 2020 due to some fallout from the COVID-19 pandemic that made comparisons to last year less informative):

Compared to 2020:

• A record low of just 19 days on market for homes that sold during the period, down 16 days from the same period in 2020.
• A record high of 48% of homes sold for more than their list price, up 20 percentage points from the same period a year earlier.
• A record-high 101.4% average sale-to-list price ratio, which measures how close homes are selling to their asking prices, up 2.7 percentage points year over year. This means that the average home sold for 1.4% more than its asking price.
• A record-high 58% of homes that went under contract had an accepted offer within the first two weeks on the market.
• A record-high 45% of homes that went under contract had an accepted offer within one week of hitting the market.

Compared to 2019:

• Pending home sales were up 23% from the same period in 2019.
• New listings of homes for sale were down 8% from the same period in 2019. Compared to the four-week period ending April 4, new listings were up 9%, slightly larger than the 7% increase during the same period in 2019. Although new listings are still in short supply, they are following a typical seasonal pattern and showing slightly more growth than in 2019.
• Active listings (the number of homes listed for sale at any point during the period) fell 48% from the same period in 2019.

View the full report and methodology at Redfin.com.