Wildfires Threaten SoCal Housing Markets Already Struggling with Unaffordability and Low Inventory, According to Redfin

• National home prices rose 7.8 percent in November as inventory declined 12.8 percent
• Pace and competition in housing market continued to accelerate in November after 26 months of inventory declines
• Sonoma County housing market felt impact of October wildfires as inventory plunged 47 percent
• In Ventura and Santa Barbara counties where wildfires are threatening homes, inventory has declined by double-digits for three months straight and fires could worsen the inventory shortage
• San Jose prices climbed 23 percent and competition reached new heights in November

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — Home price growth was strong in November, up 7.8 percent from last year, according to Redfin (www.redfin.com), the next-generation real estate brokerage. The median sale price was $292,000 across the markets Redfin serves. Sales were down 1.3 percent. The number of homes for sale declined 12.8 percent compared to a year ago, marking 26 months in a row of inventory declines.

“Overall, 2017 has been an uneven year for home sales. The year started out strong, but a combination of low inventory and weather events overtook sales growth; sales have been flat to declining in six out of the past 11 months,” said Redfin chief economist Nela Richardson. “The good news is markets have been quick to recover from severe weather events, even as challenges remain. For example, Houston home sales were up 4.3 percent in November from a year ago, and Tampa sales were up 6.1 percent. We are hopeful that Southern California markets show the same level of resilience in the aftermath of wildfires there.”

The number of homes newly listed for sale in November increased a modest 1.1 percent. Any increase in new listings is welcome news for buyers, however, the number of homes put on the market in November wasn’t enough to put a dent in the long-standing inventory shortage. There were 3.1 months of supply in November, far below the six months of supply that represent a market balanced between buyers and sellers. Nationally, the typical home spent 46 days on the market, four days fewer than last November.

2017 has been the fastest market on record and if current trends continue, Redfin predicts 2018 will be even faster.

Wildfires Threaten California Communities Already Facing Inventory Shortages

In parts of Los Angeles, Ventura and Santa Barbara counties, hundreds of homes have been destroyed by wildfires and hundreds more are under threat from fires that remain uncontained. While it is too early to know how many families and homes will be impacted, we do know these counties are already facing a shortage of homes for sale. Families who are displaced by the wildfires will find it challenging to find another home for sale nearby.

In Ventura County in November, inventory was down 17.6 percent and prices grew 9.8 percent year over year to a median of $600,000. In Santa Barbara County, inventory was down 23.3 percent and prices grew 6.8 percent year over year to a median of $575,000. The fires will cause further stress in an already tight housing market.

“The fires have had a big impact on the people and communities in and around Ventura, Ojai and Santa Barbara,” said Redfin agent John Venti. “Our already low inventory levels are likely to take a beating in the coming months not only from the loss of homes but also the disruption of life and business in the area. A few prospective home sellers have texted me as they were being evacuated to cancel our listing consultation appointments. But these fires, devastating as they are, are temporary. I’m optimistic that people will resume their holiday festivities and business as usual as soon as the fires are extinguished and the air clears.”

The impact of the October wildfires in Northern California was seen in November market data. In Santa Rosa, one of the hardest hit cities, inventory fell 46.6 percent in November from a year prior, a 27.8 percent drop from October. Across Sonoma County, inventory declined 31.2 percent year over year and prices rose 15.2 percent to a median of $633,000. The typical home in Sonoma County sold for 101.6 percent of the asking price, the highest sale-to-list price ratio since 2013. This spike in competition is unusual for the November market and likely related to the fires.

Home sales were up 8 percent year over year in Santa Rosa and 6.4 percent in Sonoma County in November. December sales in the affected areas may decline as a result of the fire activity.

Other November Highlights

Competition

• The most competitive market in November was San Jose, CA where 75.9% of homes sold above list price, followed by 73.1% in San Francisco, CA, 66.0% in Oakland, CA, 43.5% in Seattle, WA, and 42.0% in Tacoma, WA.
• The average sale-to-list price ratio in San Jose was 107.9 percent, the highest on record in that market since Redfin began tracking this data in 2009.
• San Jose, CA and Seattle, WA were the fastest markets at 12 median days on market, followed by Oakland, CA (14), Boston, MA (15) and San Francisco, CA (17).

Prices

• San Jose, CA had the nation’s highest price growth, rising 23% since last year to $1,076,000. San Francisco, CA had the second highest growth at 18.5% year-over-year price growth, followed by Cleveland, OH (15.9%), Seattle, WA (15.4%), and Salt Lake City, UT (13%).
• Honolulu, HI was the only metro with a price decline in November falling 3.2%.

Sales

• 4 out of 73 metros saw sales surge by double digits from last year. Richmond, VA led the nation in year-over-year sales growth, up 14.6%, followed by Honolulu, HI, up 14.2%. Philadelphia, PA rounded out the top three with sales up 10.8% from a year ago.
• Allentown, PA saw the largest decline in sales since last year, falling 13.3%. Home sales in Grand Rapids, MI and Rochester, NY declined by 13.1% and 11.0%, respectively.

Inventory

• San Jose, CA had the largest decrease in overall inventory, falling 50.2% since last November. Atlanta, GA (-32.1%), Buffalo, NY (-30.4%), and Oakland, CA (-29.1%) also saw far fewer homes available on the market than a year ago.
• Salt Lake City, UT had the highest increase in the number of homes for sale, up 40.3% year over year, followed by Baton Rouge, LA (10.9%) and Austin, TX (9.1%).

To read the full report, complete with data and charts, please visit the following link: https://www.redfin.com/blog/2017/12/market-tracker-november-2017.html

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, subscribe here. To view Redfin's press center, click here.

View source version on businesswire.com: http://www.businesswire.com/news/home/20171214005178/en/

Redfin Journalist Services:
Alina Ptaszynski, 206-588-6863
press@redfin.com

Source: Redfin

Released December 14, 2017