With gas prices low and consumer confidence at the highest level reported in seven years, there's a lot to be cheery about. However, positive consumer sentiment doesn't necessarily translate into more sales.
With gas prices low and consumer confidence at the highest level reported in seven years, there's a lot to be cheery about. However, positive consumer sentiment doesn't necessarily translate into more sales. According to Redfin, the number of homes sold plunged 21% in November versus October and was down 5% from the same time a year earlier.
Another sign of the slowdown in November was a 27.7% dip in new listings. The average number of days on market and the percentage of homes selling above list price were little changed from October, according to data from Redfin.
Year-over year home sales dropped across Redfin markets, and while homes were no longer flying off the market, one in four homes still sold in two weeks or less in November and one in six homes sold for more than list price.
Despite declined sales, home prices didn't budge. In fact, the median sale price has essentially flatlined at $274,000 for the past three months, a pattern that is different from 2013 when prices decreased by 0.9% from September to November. On a year-over-year basis, the median sale price increased 6.2% in November 2014, according to Redfin data.
"Ideally, price growth would be accompanied by strong sales. This would indicate that the market was in balance," wrote Redfin. "A balanced market is one in which buyers and sellers are on the same page when it comes to prices and there’s enough inventory to meet buyer demand and vice versa."
Sales decreased the most from last year in three California metro areas: San Francisco (-19.4%), San Jose (-18.8%) and San Diego (-17.5%). According to Redfin, the sales slump was not due to absent buyers but to too few sellers. Inventory plunged 22% on average in these three metros in November from October.
“A lot of buyers who didn’t find homes this summer expected to buy during the holiday season when the market usually slows down and there’s less competition, but now there are fewer homes for sale,” said San Jose agent Angelica Robles.
