Redfin reports that available homes for sale eased by 0.3%
Homebuyers are facing a renewed challenge from declining inventory according to Redfin.
The brokerage has reported a 0.3% year-over-year decline in for-sale inventory nationally in late June, the first decline since supply began rising in September last year.
At the current sales pace, if inventory were to continue to decline at the rate seen last month, there would have been a 4% annual decrease in available homes by September 2019.
However, of the 46 major markets in which Redfin operates, 32 had fewer homes for sale compared to a year earlier; with many affordable markets having less choice for buyers while some of the most expensive saw inventory rise.
Oklahoma City for example, one of the most affordable markets (median price of homes sold in May was just $184,900) had 15.3% fewer homes for sale in late June compared to a year earlier and has not seen year-over-year growth since turning negative in late 2016.
Other affordable metro areas like Memphis and Pittsburgh have similar stories.
At the other end of the scale, San Jose (up 43.6%, median price $1,175,000), Seattle (up 21.9%, median price $592,500), and Boston (up 21.3%, median price $517,000) were the three metro areas that gained the most homes for sale compared to a year earlier, albeit at a slower pace than in late 2018.
Transition for San Francisco?
In San Francisco, the number of homes for sale was still up 12.0% from a year ago - far less than San Jose or Seattle – and supply growth is down from a high of over 60% in late December, indicating that San Francisco is transitioning from a sharp cooldown back to a hot market.
"Lower interest rates are bringing buyers back, but without enough homes for sale to meet demand, we expect to see more bidding wars, which will push prices up this summer," said Redfin chief economist Daryl Fairweather. "We expect small, inland markets where a typical home is still affordable for a middle-class family to heat up the most. Those markets, like Knoxville and Akron, are already experiencing double-digit annual price growth, and there is a lot of room for prices to continue to grow. Expensive metros like San Jose and Seattle may see moderate price growth this summer, but for the most part those markets have already peaked."
