U.S. home-sale prices increased 5.3 percent year over year to a median of $307,400 in July, according to Redfin, the real estate brokerage. The price growth rate has been dropping for five consecutive months and has not been this low since September 2016. Homes sales increased 4.1 percent in July compared to July 2017 as inventory declines continued to moderate.
The number of homes for sale in July was down 5.4 percent year over year. This marks the third month of supply declines around 5 percent following 19 months of inventory declines of over 7 percent.
Homes that sold in July went under contract in a median 35 days, three days faster than last year and one day slower than in June. While homes are still selling near a record-fast pace, there are some signs competition is waning. For the first time since March 2015, the share of homes that sold above asking price declined year over year– albeit slightly– from 26.5 in July 2017 to 26.2 percent last month. Twenty-eight percent of homes on the market in July had a price drop, the largest share on record since Redfin began tracking this metric in 2009, and a 3.2 percentage-point increase over last July. It’s worth noting that the share of homes with price drops typically peaks each year in July or August.
Metro Trends
For the second month in a row, inventory increased year over year by double digits in San Jose, California, (28.0%) Seattle (27.0%) and Portland, Oregon, (21.8%). These markets also experienced sales declines of 11.9 percent, 6.4 percent and 6.1 percent, respectively. In Portland, homes took a median 15 days on market (DOM) to sell, a full week longer than last July. In San Jose (16 DOM) and Seattle (9 DOM), it took one and two days longer, respectively, for homes to find a buyer this July compared to last year.
Home prices continued to rise in these metros year over year, but they are rising at a slower rate. In Portland, home prices were up 4 percent year over year, the lowest price growth in 41 months. Seattle home prices increased 8 percent compared with last year, the lowest growth in 27 months. San Jose home prices grew 19.3 percent. While still the highest growth of any metro Redfin tracks, this was the lowest price growth San Jose has seen in nine months.
The market is also slowing down in Washington, D.C., and Baltimore where homes took 19 days and 10 days longer to sell than last year, respectively. Home prices grew just 0.7 percent in Washington, D.C. and fell 0.5 percent in Baltimore. Sales in Washington, D.C. grew 12.7 percent as inventory increased 9.1 percent. Baltimore sales surged 55.7 percent compared to last July, though this can be partially attributed to unusually low number of sales last year. The supply of homes in Baltimore declined less than a percent in July compared to last year.
While these hot coastal markets are showing signs of cooling, competition is heating up in some smaller, inland metros. In Indianapolis the typical home that sold in July found a buyer in 10 days, 25 days faster than last July. In Atlanta (23 DOM); Rochester, New York (15 DOM); Buffalo, New York (14 DOM); and Knoxville, Tennessee (55 DOM), homes sold more than two weeks faster this year compared to last year.