Homes in May went under contract faster than ever, according to a report by Redfin. With properties going under contract in 34 days, May broke April’s record of 36 days. But that was just the average. According to the report, a typical home in Denver went under contract in just six days. Seattle and Tacoma were a close second, with homes going under contract in seven days. Boston and Grand Rapids saw the typical home spend eight days on market. Speed was not the only thing on the rise in May. Redfin found that across the 174 markets the national median home sale price rose to $305,600, a 6.3 percent increase from last year. Sales in May saw 28 percent of homes go above their list price, which was also a record, Redfin reported.
At the same time, nearly a quarter of homes for sale had a price drop in May, the highest percentage of price drops since September of 2017.
"Prices are still increasing, but not at the same rate we saw earlier in the spring," said Taylor Marr, Senior Economist at Redfin. "The record percentage of homes sold above list price is at odds with the higher percentage of price drops in May. This tells us that while it's still very much a seller's market, price growth and rising mortgage rates may be pushing buyers to the limit of what they're able to pay."
Then, of course, there is inventory. According to the report, the national market had 2.5 months of supply at the end of the month. Individual markets, however, varied widely.
In San Jose, the supply of San Jose homes fell 14 percent in May, compared to last year. That drop was the smallest decline in a 16-month stretch of inventory declines, Redfin reported, adding that the numbers show “the intensity of San Jose's inventory shortage.”
However, the number of newly listed homes in May ticked up 11 percent in San Jose compared to last year.
Indianapolis had the largest decrease in overall inventory, with the number of properties for sale down 38 percent from a year earlier. Portland, Ore., on the other hand, saw the number of homes on the market increase by 35 percent.
Overall, the number of newly listed homes for sale increased 4.3 percent compared to last May, though the total supply of homes national declined 5.4 percent during the same time period.