Home prices in February hit a four-year high, capping a 72-month run in which median home values rose nationally, according to a report by Redfin.
But just because the prices went up does not mean sales went up. In fact, while national median prices rose almost 9 percent (to $285,000) in February, the number of homes for sale dropped more than 11 percent from January and were flat compared to a year ago. It was the twenty-ninth consecutive month inventory suffered, while prices keep going up.
Only six of 73 metros saw sales grow by double digits from last year, the report said. Louisville led the nation in year-over-year sales growth, up 25 percent, followed by Greenville, South Carolina, which was up 18 percent.
Inventory dropped most in New York State, where three metros saw downswings compared to last year. Inventory in Rochester and Buffalo dropped 40 percent and in Albany, 30 percent. Atlanta also posted a 33 percent decline in inventory.
As availability and affordability continue to constrain the market, interest in buying a home is humming along nicely. Time on the market for homes sold in February was 53 days, a week faster than a year earlier.
That’s just the average. In Seattle, half of all homes pending sales closed in just eight days—four days faster than it was a year earlier. Denver and San Jose reported closings in nine and 10 median days on the market, respectively. Homes in Oakland and San Francisco spent two weeks on the market.
The most competitive market in February was San Jose, where 83 percent of homes sold above list price. Three-quarters of homes for sale in San Francisco did the same. Oakland, Seattle, and Tacoma also saw homes close significantly above asking price. Overall, Redfin reported, 21 percent of homes that sold in February went for more than their list price, nationally. That number is up 20 percent from last year.
The median value of off-market homes was $283,300, a 9 percent uptick percent from last year. Almost two-thirds of homes on the market in February were priced above their Redfin Estimate value.
“Mortgage rates pushed upwards in February to the highest levels in nearly three years as home prices increased by their fastest pace in nearly four years,” said Redfin chief economist Nela Richardson. “A growing economy, healthy buyer demand, and low inventory drove the ramp up in prices last month. Combining even slightly higher rates with price growth this strong will make it even more challenging for first-time buyers to find affordable homes to buy this year. The good news for sellers is modest rate increases are unlikely to curtail buyer demand. Just 6 percent of respondents to a survey commissioned by Redfin said they would cancel their home buying plans if rates rose above 5 percent.”
On the other side of the country, and on the other side of the numbers, sales in Long Island saw the largest decline in sales since last year, falling 33 percent. Home sales in Minneapolis and Miami also dropped, each by 13 percent.