Home prices soared last month, climbing 8.9 percent over March of last year with 23.9 percent of homes selling above list price. The jump was the biggest monthly growth in the past four years according to a new report from tech brokerage Redfin.
While prices jumped, the lack of homes for sale (-11.9 percent year-over-year) and the low number of homes newly listed for sale (-5.6 percent year-over-year), led to an overall 3.9-percent decline in sales compared to March 2017. Redfin’s chief economist Nela Richardson believes an early Easter holiday may have contributed to the declines.
“Sellers are slow to list this year and we aren’t seeing enough new construction homes to fill the gap,” said Richardson. “If we don’t see the new listings number turnaround next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year.”
Compared to last year, inventory dropped in 65 of the 73 metro areas Redfin tracks, and declines reached more than 10 percent in 48 of those metros. Baton Rouge, Louisiana, on the other hand, saw a 26.6-percent increase in inventory. Washington D.C. (+11.8 percent) and Allentown, Pennsylvania (+11.4 percent) also saw a significant uptick in housing supply over the same time frame.
Low inventory numbers led to a competitive market last month with strong buyer demand that led to quick closings, the report added. The typical home went under contract in 43 days — eight days quicker than a year earlier, and faster than any March since Redfin has been tracking data.
Just over 20 percent of homes sold went under contract with two weeks of their market debut, according to the report. In the fast-moving markets of Seattle and Denver, homes were on the market for an average of just one week.