Real estate’s cry of pain: low housing supply, high prices, again

Against the backdrop of a chronically low supply of houses, competition among buyers drove home prices up nationally in April.

Prices across the U.S. rose 6.2 percent from a year earlier, according to a new report from Redfin. But the real news concerns the dearth of inventory: The number of homes for sale fell 13.3 percent from a year earlier, the sharpest decline in four years — and the 19th consecutive month in which the housing supply has fallen.

In portions of the Bay Area, the numbers were even more dramatic, the report shows. In the San Jose metro, the number of homes for sale plunged 28.5 percent on a year-over-year basis — a shocking statistic, given that the spring season typically sees an upsurge of inventory. The San Francisco metro experienced a 12.8 percent decline, while inventory in the Oakland metro fell 12.3 percent.

But this is not a typical market. Bay Area inventory has been down for a number of years now, and the rest of the nation has been catching up with the trend.

With buyers fighting over the limited home supply, the U.S. median home price rose to $280,000 in April. The Redfin report covers single-family homes, condos, townhouses as well as homes with two-to-four units.

The lack of inventory “kept a lid on sales, which inched up just 1.2 percent compared to” a year earlier, Redfin says. The low supply also seems to have pushed buyers to make snap decisions on purchases: The typical home “went under contract in 40 days, 10 days faster than a year earlier,” the report continues. Not only that, but nearly one in four homes (24.7 percent) sold above list price.

The nation’s “fastest” metro market was Denver, where nearly half of all homes were under contract in six days, followed by Seattle (seven days), Portland (10 days) and Tacoma, Washington (10 days).

The fiercest bidding was in the Bay Area. In the San Jose metro, 75.4 percent of homes sold above asking, followed by 69.5 percent in the San Francisco metro and 69.4 percent in the Oakland metro. In that order, those were the three “most competitive” metropolitan areas in the U.S., as defined by Redfin.

More numbers for the Bay Area metros:

  • The median price of a home rose 9.3 percent to $683,000 in Oakland, where sales declined 8.0 percent from a year earlier.
  • The median rose 4.99 percent to $960,000 in San Jose, where sales dropped 12.0 percent.
  • The median rose 3.7 percent to $1,250,000 in San Francisco, as sales slipped 3.1 percent.

One more bit of information about this strange spring market: The number of homes listed specifically during the month of April was also down dramatically from a year earlier — by 19.3 percent in San Francisco and 10.9 percent in San Jose and Oakland. Nationally, new listings dropped 8.8 percent.

Top: A home for sale in Lafayette, Calif. (Courtesy of Redfin)



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