Home prices rose in April, sales increased and inventory expanded. And it all happened at breakneck speed, according to a report from real estate brokerage Redfin, with homes selling at the fastest pace on record.
In April, 35.2 percent of all houses going under contract within 14 days of their initial listing. That’s up from 34.5 percent in March, the previous all-time high. The fastest-selling market was San Jose with 63.3 percent of homes going under contract in two weeks. San Francisco was next with 57.3 percent, followed by Denver with 54.3 percent and Ventura with 51.4 percent. On the other end was Boston, the slowest-selling market with only 3.2 percent of its home selling within 14 days.
Mortgage finance company Freddie Mac reported last week that new homes are also selling quickly with the median time-on-market dropping to five months, down dramatically from the Recession peak of 14 months and almost back to pre-mortgage meltdown historical averages.
Tight inventory continues to create bidding wars among sellers, forcing prices up and moving homes out quickly. Total housing inventory is down 26 percent from April 2012, with certain parts of the West being most heavily affected. Still inventory posted a monthly gain of 6.4 percent, the largest gain in three years, a testament to the excitement in the market. As prices rise, fence-sitting homeowners decide conditions are ripe for selling. The California Inland Empire, Denver and San Diego were the only markets of the 19 measured where inventory shrank in April from March.
Home prices, according to Redfin, made an impressive 16 percent jump from the previous year and a 5 percent increase from March, with all 19 cities registering both monthly and yearly price growth. San Francisco saw the greatest price appreciation, increasing 34.5 percent compared to the year before.
Freddie Mac analysts predict that builders will ramp up new home starts by 200,000 in 2014, but until inventory catches up with demand we are likely to see sellers control the market for some time.