Year-Over-Year Prices Rose in All 19 Markets, Inventory Reaches New Lows
Home prices are off to a strong start in 2014. Last year, prices were up 14 percent in January and then continued to rise sharply during the first half of the year, leading us to wonder if they were reaching unsustainable territory. But, here we are again, with January 2014 home prices up another 14.3 percent.
January’s price strength reflects an ever-worsening inventory situation. While it is too soon to tell how exactly inventory will play out this spring, Redfin agents report that most of their home selling clients are planning to list between March and May, rather than listing early, for several reasons:
- Low inventory: Home sellers are frustrated with the limited options and want to wait until there are more homes to buy before they list.
- In no rush: Home sellers are feeling confident that their home will sell easily, and feel no pressure to list early.
- Profit-focused: Home sellers believe they will get the best price for their home during spring.
|Median Sale Price||$316,760||-3.4%||+14.3%|
|Total Homes Sold||49,781||-27.1%||-9.9%|
|Total Homes For Sale||197,655||-5.4%||-9.4%|
Prices Off to a Strong Start
The slowing trend of home price growth during the second half of 2013 has reversed course as illustrated in the chart below. Between April and October of 2013, year-over-year price growth slowed considerably from 18.7 percent to 12.6 percent before rising once again in December (+13.2%) and January (+14.3%). Housing markets along the West Coast showed the largest price gains in January with Las Vegas (+24.6%), Ventura (+21.1%), and Riverside (+21.0%) leading the way.
Home Sales Hit Four-Year Low
Even though prices strengthened in January, the number of homes sold fell 9.9 percent from the year before. Sales in January, which reflect offers made by homebuyers during the holiday season, traditionally reach the lowest point of the year. However, this year, sales were further limited by constrained inventory as well as sluggish homebuyer demand due to worsening affordability.
How Low Can Inventory Go?
A year ago, we didn’t think inventory could go any lower, yet we’re beginning 2014 with another disappointment. The number of homes for sale in January fell 9.4 percent from the prior year and is down for the fourth consecutive month. Twelve of 18* markets saw a drop in number of homes for sale with the largest inventory drops in Boston (-31.8%), Chicago (-25.6%), and Portland (-24.4%).
*Denver was excluded from inventory measurements due to data anomalies
Continued Low Inventory Likely to Drive Prices Even Higher
Based on historical trends and insights from Redfin agents, we don’t expect inventory and home sales numbers to improve much or at all in February, which means that prices will keep rising. Pending home sales in February also suggest higher prices for the month.
Home Price Trends By Metro
|Metro Area||Median Sale Price||Month-Over-
Homes Sold By Metro
|Metro Area||Homes Sold||Month-Over-
Homes For Sale By Metro
|Metro Area||Homes For Sale||Month-Over-
About the Real-Time Home Price Tracker
Redfin’s monthly report on home prices, inventory levels and sales volume is an up-to-date, accurate portrait of the U.S. real estate market, published before other market reports. As a broker with access to dozens of Multiple Listing Services (MLSs) used by real estate agents to list properties and record sales, Redfin gets data within minutes of a sale, pending sale or listing activation, well before any government, media or analytics organization. Full data for January 2014 may be downloaded in a spreadsheet.