In November, housing inventory climbed 5%, marking its fastest growth in the last three years, according to new data from Redfin.
Last month, U.S. home sale prices rose 3.3% year-over-year, coming in at a median of $298,800. In fact, November was the third consecutive month of annual home price gains below 4%, following a 77-month long streak of annual home price gains surpassing 4%.
Redfin Chief Economist Daryl Fairweather said the tide has turned.
“Sellers are now competing for buyers, but they haven’t all realized it yet. Sellers who have adjusted their price expectations downward are still finding plenty of willing buyers,” Fairweather continued. “Sellers holding out for high prices are contributing to declining home sales and growing inventories."
However, Fairweather said there are a few signs that buyers are likely to reward their patience.
According to Redfin’s analysis, the number of completed home sales retreated 8.3%, falling at the fastest rate in over two years. Furthermore, 65 of the 75 largest metro areas that Redfin tracks experienced a decrease in home sales.
These are the only metros that saw more than a 5% year-over-year increase in sales in November:
- New Orleans increased 9.4%
- Tampa increased 7.2%
- Long Island increased 7.1%
- Orlando increased 6.5%
Redfin explains that the balance of supply and demand has shifted back into the buyers’ favor, as home sales fall back and the number of homes on the market increase.
In November, the number of homes for sale increased 4.9% year-over-year, reaching the highest level of inventory growth since June 2015. Notably, this is the eighth consecutive month that figure has increased from the prior year, according to the report.
These were the metros where inventory skyrocketed:
- San Jose increased 123.2%
- Seattle increased 96.5%
- Oakland increased 60.3%
According to the company, the typical home that sold in November went under contract in a median of 44 days, which is two days faster than last year. Of these homes, 19% sold above the list price, decreasing from 22.2% the same time last year. Lastly, Redfin reports the share of homes with a price drop declined 24.6%.