The effects of low housing inventory continue to cause significant ripples in the housing market, as a recent Redfin report shows home sale prices across the country have reached an average of $344,625 — an all-time high, and an 18% increase year over year.
That’s well above the average home sale prices in Redfin’s March report, at the time a record high of $331,590. But the current prices aren’t deterring homebuyers.
In looking at more than 400 metros, Redfin found that homes sold during a four-week period ending April 18 were on the market for a median of 21 days, the shortest time on market since 2012. That’s also 16 days fewer than the same period in 2020. And 45% of homes sold for more than their list price, another an all-time high.
At the highest points in 2019 and 2020, average home sale prices never went above $300,000 and $325,000, respectively.
The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, increased 2.3 percentage points year over year to an all-time high of 101.0%. That means the average home sold for 1% more than its asking price.
There are levels to the shortage that go beyond the surface. Despite what is undoubtedly a seller’s market, many prospective sellers — candidates that, in a different market, would be happy to sell — are instead choosing to stay put for fear of being unable to find or afford a new home.
That’s led to a shortage of mid-priced homes on the market, and an uptick in available luxury-priced homes. In all, Redfin reported 528,861 active listings in the four-week period, down 40% year over year.
Markets with interesting luxury home numbers include Denver, where high-priced homes are staying on the market an average of only 14 days; Phoenix, where luxury homes are selling, on average, for 25% more than they did in 2020; Warren, Michigan, which has 73.8% more luxury homes on the market than in the first quarter of 2020; and San Francisco, where luxury homes are averaging nearly $4 million — the highest median price of Redfin’s study — but are still flying off the shelves in only 16 days, on average.
“If [prospective sellers] move and buy another home they will face a very competitive housing market as buyers, and they don’t need to sell to take advantage of record low mortgage rates — they can just refinance their current home,” said Daryl Fairweather, Redfin chief economist.
Fairweather added that it’s becoming increasingly clear that the COVID-19 pandemic isn’t the sole reason people aren’t selling their home.
“There has been an ongoing debate at Redfin about whether fear of coronavirus infection was keeping homeowners from selling,” she said. “With a third of American adults now fully vaccinated and still hardly any homes being listed for sale, we’re close to settling that debate. And on top of that, builders are struggling to construct new homes given an ongoing lumber shortage. Without more homeowners listing, buyers are scrambling to compete for the limited number of homes on the market, which continues to drive prices up to new heights.”
The ones that are selling are getting their money’s worth on the initial listing. Redfin found that the average listing price over the same four-week period skyrocketed to $356,175 — a 19% increase year over year. The highest average listing price in 2020 was in October, at $326,625. Average listing prices never approached $325,000 in 2019.