U.S. home sale prices climbed 5.2% in November compared to 12 months before, representing the largest year-over-year increase in about 18 months, according to a report Thursday by real estate brokerage Redfin. The increase brought the median sales price to $311,600 for homes throughout the country.
Metro areas considered “affordable” by Redfin, such as Camden, New Jersey, and Detroit, posted the most significant price gains in November, according to the report. For the fifth straight month, the nine metro areas with the biggest gains all had median sale prices below the national median: Camden, (median price $200,000, up 14.3%); Detroit ($140,000, up 12%); and Bakersfield, California ($249,999, up 11.6%).
In contrast, for the first time in five months, the metro area with the 10th-largest price gains in the nation was Salt Lake City ($345,000, up 9.5%), the report said.
Among the 85 largest metro areas that Redfin tracks, just one experienced a year-over-year decline in the median sale price in November: San Jose, where home prices fell 1.1%. The California city, part of Silicon Valley, has some of the most expensive properties in the country, with median sales price around $930,000, according to recent Redfin data.
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The U.S. Luxury Market
The luxury home market in major U.S. metros appears to be recovering ever so slowly from a downturn that began in 2018 and bottomed out in August of this year, Redfin chief economist Daryl Fairweather said in an interview Thursday.
Sales of homes priced at or above $1.5 million rose 3.2% in the third quarter of 2019, after three consecutive quarters declines, including a 12%annual drop in the first quarter of 2019, according to Redfin’s most recent luxury report, which was published in November.
“As the regular market recovers, luxury recovers too, but [luxury prices are] still not as high as they were in 2017,” she said.
The amount of luxury inventory has continued to shrink in the last 12 months compared to November 2018, Ms. Fairweather said. Miami’s property surplus is being soaked up steadily; inventory was down 8% there compared to last November. Likewise in New York City, the amount of luxury inventory declined 7% and San Jose, California, saw a huge drop—16%—in available luxury properties, Ms. Fairweather said.
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Economic factors such as a healthy stock market and robust corporate profits will “be a boon to the luxury buyer who can afford these markets,” as the market’s recovery continues into 2020, she said, although the full picture may not be clear until the spring.
Nationwide, home sales across all segments of the market were up 3% in the year since November 2018, with the biggest increases in McAllen, Texas (14.7%), Anaheim, California (10.2%), and Virginia Beach, Virginia (9.2%).
November also served up small gains in the share of homes that sold above the listing price, with 20.7% compared to 19.9% in November 2018. Properties also moved a bit more quickly—homes that sold in November spent 45 days on the market, two fewer days compared to the prior year.
Supply, meanwhile, plummeted 12.1% year over year, marking the biggest decline since April 2013. It was also the fifth straight month in which supply declined, Redfin reported. Fewer homes were for sale last month than in any November since at least 2012, according to the report. Salt Lake City (-50.2%), Tacoma, Washington (-42.6%) and San Diego (-38.5%) felt the most substantial losses.
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Among the handful of cities bucking the trend with a year-over-year increase in inventory were Knoxville, Tennessee, (up 12.0%); El Paso, Texas, (up 5.2%) and Honolulu, Hawaii, (up 2.6%).
“Given that inventory is falling quickly, we’d expect to see even stronger price growth (ahead), especially when compared to last year’s soft market,” Ms. Fairweather wrote in the report. “The fact that homes are selling faster indicates that there are buyers ready to pull the trigger and take advantage of low interest rates.”
If lack of inventory and high demand continues, buyers who hang back could face less favorable conditions in the spring season, like bidding wars and faster price growth, Ms. Fairweather predicted.
