At the start of the new year, house hunters are shaking off jittery stock markets and rejoicing at falling mortgage rates. Buyer demand is holding strong after a surprisingly good December, when the number of Redfin customers requesting home tours jumped nearly 20 percent from a year earlier.
The only problem is inventory. Even though more people are touring, the number of Redfin customers making offers rose only up 3.7 percent last month from a year ago. And we’re having the slowest January in years, according to our agents, because there aren’t enough homes for sale. Homes that are on the market tend to be overpriced, which is why they haven’t sold.
As of Jan. 21, the number of homes for sale is down 11 percent from a year ago in major markets served by Redfin. In some areas the drop is even more dramatic. Seattle and Los Angeles have 29 percent fewer homes for sale than a year ago and Portland inventory is down 26 percent. Even where supply has risen, like Denver and Orange County, there still aren’t enough homes to keep pace with demand.
A housing market is balanced between sellers and buyers when there are about six months’ worth of homes for sale. Denver has only 1.3 months of supply; in Orange County it’s 2.2 months. Nationally there are only half as many homes for sale as we need.
Sellers tend to wait until spring to list their homes. To take advantage of this year’s strong buyer interest and low supply, sellers should consider listing sooner. Buyers are in the market now, so why wait?
If you’re considering selling, check out Redfin’s services for sellers. Our agents deliver better results and charge half the typical commission.