December was a hot month for homebuyers, but supply couldn’t keep up with demand. Monthly home sales saw their largest decline since the beginning of the pandemic, according to Redfin.
Month-over-month sales fell 3.6%, the largest drop since May 2020, and were down 11% year-over-year (YOY), the largest annual decline since June 2020.
The drop was the result of continuing stock shortages. Active listings declined 19% YOY, reaching a record low. New listings dropped 13%, down annually in 82 of the 88 metro areas Redfin tracks.
In addition, home prices were up 15% YOY, marking the 17th straight month of double-digit price increases.
“Home sales are slumping, but not for lack of demand,” said Redfin Chief Economist Daryl Fairweather.
“There are plenty of homebuyers on the hunt, but there is just nothing for sale. In many markets, shopping for a home feels like going to the grocery store only to find the shelves bare. In January, I expect to see more buyers and sellers in the market, but demand will increase more than supply– pushing prices higher at the start of this year.”
Median sale prices increased YOY in 87 of the 88 metros. The outlier was Bridgeport, CT, where prices fell 0.4%.
Austin, TX, North Port, FL, and Phoenix, AZ saw the biggest price increases, 30% for Austin and 28% for both North Port and Phoenix.
Home sales fell annually in 79 of the 88 metros, with the largest seen in Nassau County, NY (-22%), New Brunswick, NJ (-22%), and Albany, NY (-21%). The largest gains were in Greenville, SC (+9%), Greensboro, NC (+8%), and Baton Rouge, LA (+7%).
“The wild housing market did not take a break for the holidays,” said Brionna Chang, a Redfin real estate agent in the San Francisco area. “There was one two-bedroom home in Orinda that was listed just before Christmas and around 40 people immediately came to the open houses. It ended up getting multiple offers and going for $325,000 over the $1.2 million asking price.”
But while buyers were active, December saw a moderately less competitive market than the previous months. The overall picture reflects a cooling housing market constrained by the lack of housing.
The typical home spent 24 days on the market, nine days longer than June 2021’s record low of 15 days but a week faster from the same time a year earlier. Fewer homes sold above list price as well, with 43% selling above asking, down 14% from June but up 9% year-over-year.
The average sale-to-list price ratio in December was 100.5%, down from a record high of 102.6% in June but up from 99.4% a year earlier.