Buyers in the hottest markets became choosy as much-needed inventory arrived
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Housing demand slipped in June from May as home tour requests and offers fizzled, according to the Redfin Housing Demand Index.
The index dipped 0.7% to 120 amid a 2.2% decline in the seasonally adjusted number of homebuyers requesting tours and a 12.2% decrease in the number making offers on homes. The index is based on thousands of Redfin customers requesting home tours and writing offers.
On a year-over-year basis, the index fell 9.6% from its June 2017 level. The drop marked the largest year-over-year decline since April 2016. Homebuyers asking for tours decreased 6.1%, while 15% fewer made offers.
Redfin also found a 3.8% decline in the total number of homes for sale and a 1.6% drop in the number of newly listed homes compared to June 2017 across the 15 metros covered by the index. Despite the declines, the report noted that these measures are moderating given the large increases in the for-sale inventory in some of the most supply-starved markets.
"As much-needed large inventory increases finally arrive in some of the hottest markets, buyers are taking the opportunity to be choosy, offering only on well-priced homes," said Pete Ziemkiewicz, head of analytics at Redfin. "Buyers in Seattle are even keeping offer contingencies like the inspection intact, something that has been increasingly rare in recent years. With more homes to go around, buyers don't need to bid as aggressively to win bidding wars, so prices, while still growing, are growing a lower rate, and home sales are slowing."
The number of homes for sale posted double-digit year-over-year increases in Seattle and Washington, D.C. Seattle saw homebuyer demand fall 3.4% from May and 14.8% from June 2017, while Washington, D.C., posted a 3.7% decline in demand from the previous mount and a 14% year-over-year drop.
Also with a double-digit increase in inventory, Portland’s homebuyer demand was flat from May but grew 12.3% from June 2017.
