December saw one of the smallest increases in home sale prices in recent years, according to recent data from Redfin. Redfin’s December 2018 housing market analysis saw sale prices increase by just 1.2 percent year over year, to a median of $289,800. According to the data, this year over year increase in home prices was the smallest since the number went positive in March 2012.
"December may feel like a foot on the brake, but the housing market was going over the speed limit," said Redfin Chief Economist Daryl Fairweather. "Home prices have been growing faster than wages since 2012, and that can't go on forever. Now that price growth has slowed down and more homes are sitting on the market, buyers will have the upper hand in 2019. Buyers will have more options with more homes for sale, and it will be sellers working to woo buyers into making an offer. And as a bonus, buyers, for the time being, have the benefit of mortgage interest rates that are lower than they were in late 2018, which will make borrowing more affordable."
According to Redfin, the median sale price of homes fell in nine of the 76 largest metro areas. San Jose fell by 7.3 percent while Boston saw a 1.0 percent decline, the first decline these two metros have seen since January 2012. Redfin notes that San Jose has experienced particularly dramatic swings recently, with year-over-year gains in excess of 20 percent between November 2017 and June 2018, while the rest of the country saw completed home sales fall fast, down 10.9 percent from December 2017. In 69 of the 76 largest metro areas that Redfin tracks, home sales have declined.
"Buyers shopping now are benefiting from sellers who are willing to negotiate, since it's anyone's guess what the spring real estate market will look like," said Seattle-based Redfin agent Jessie Culbert. "Well-priced, appealing homes are seeing the return of pre-inspections and even multiple offer situations, so it may be too soon to get comfortable with the idea of a slower market."