Red-hot US housing market begins to cool
There are fewer bidding wars and homes selling above asking price, Redfin report finds
By Brooklee Han
9/15/2021
Though the demand for homes remained strong across the United States in August, there are clear signs that the housing market is past its peak.
A report from residential brokerage Redfin found that pending sales across 400 metro areas were up 6% year over year in the four weeks that ended Sept. 5. Still, the 69,563 homes that went into contract represented a 9% decrease from the high point set in May 2021.
The decrease in pending sales is just one indicator of a softening in the competitiveness of the housing market: the number of homes with an accepted offer within two weeks on the market fell nine percentage points from the 2021 peak set in March, and the share of homes sold above asking price dropped to 50.1% from 55% in early July 2021, according to Redfin.
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Redfin’s lead economist Taylor Marr said in a statement that he believes this cooling off in the housing market to be seasonally typical and that he expects demand for homes to remain strong throughout the fall.
“More homes were listed this summer, but they were quickly snatched up by homebuyers even as bidding wars have become more rare,” Marr added.
Also noted as seasonally typical is the 16% decline in new home listings from the 2021 peak in June. Overall, however, new home listings are down 7% from a year ago and total active home listings are down 23% from 2020, Redfin said.
This limited inventory and strong demand is reflected in the 14% increase of the median home-sale price to $358,250, with the median asking price of newly listed homes at $353,500. Although this price is on-par with asking prices in April of this year, it is down 2% from the all-time high set in June 2021.
The Redfin report also found that on average nearly 5% of homes for sale each week during the month that ended Sept. 5 had a price drop, which is the highest level of price drops per week since October 2019. This may be a reflection in the median number of days homes that sold were on the market increasing to 19 days from an all-time low of 15 days in late June and early July 2021.
While the average sale-to-list price ratio remains above 100% at 101.4%, this is a decrease of 0.9 percentage points from its peak in June and July 2021. (It is still two percentage points higher than the 2020 high, according to Redfin.)
While a housing market report by the National Association of Realtors found that existing-home sales grew 2% in July from the prior month, first-time homebuyers were disproportionately squeezed by tight inventory and rising prices.
If substantial relief for those homebuyers comes, it may not be until the fall at the earliest. Housing starts that month fell 7%, which experts attributed to slow labor growth and choked supply lines. Such economic indicators are likely to improve slowly and gradually in upcoming months.
It Took Homes 11 Days To Sell In Denver In August. That Might Be A Sign That The Market Is Slowing
By Sarah Mulholland
9/04/2021
Home sales in the Denver metro are slowing, giving some buyers a chance to jump into what has been a highly competitive market for more than a year.
In August, houses sat on the market for an average of 11 days, according to a new report from the Denver Metro Association of Realtors. That may not sound like a lot, but it’s an increase from nine days in July.
And, earlier this year, homes were routinely going into contract within three to four days of being put on the market in the metro area, which includes Boulder and Broomfield counties.
Buyers typically move slower in late summer as families settle in for a new school year, Andrew Abrams, chair of the real estate association’s trend committee and a realtor in the area, noted in the report.
“They are a bit more patient, wanting to find the right house for the ‘right’ price,” Abrams wrote.
How long it takes to sell a home depends on its price, with less expensive homes selling faster than more expensive ones. A home with a price tag that is less than $500,000, for example, might be on the market for nine days, while a home priced in the $750,000 to $1 million range might sell in 16 days.
In August, the median price for a home in Denver was $540,000, which was about the same as July. But that’s 17 percent higher than it was a year ago.
It’s too early to tell whether the recent slowdown is due to seasonal patterns or the housing market beginning to correct itself after a boom that drove double-digit price gains across much of the state and the country.
“Sellers have basked in the control seat for so long that it can be hard to set reasonable expectations,” realtor Amanda Snitker wrote in the report, advising homeowners to prepare for a slower sales process.
While sellers might not be getting multiple bids in one weekend, low interest rates and a lack of homes for sale are still fueling a tight housing market.
A record-low 3,582 homes were listed last month in metro Denver, marking a 35 percent decline from the same time in 2020, according to the report. Typically, there are about 16,000 homes for sale in August, though that number topped 31,000 homes in 2006 — a record high.
So far this year, Denver home sales have totaled more than $25.5 billion, a 25 percent jump compared to this time last year, and about five percent above sales volume in August 2019. The pandemic shifted the normal ebbs and flows of the housing market, halting sales in the spring and early summer of 2020, and pushing them into the colder months.
