Though home closings dropped in August, stats still show the market may be strengthening.
Redfin conducted its Real-Time Demand Pulse, its monthly analysis of customers touring homes and offers being made in 18 markets across the U.S., and found that homebuyers requesting showings were down 6 percent and offers fell about 4 percent in August.
Home Closings Down, but Market Strengthening
But the good news is the decrease in showings is the same as last year, and though offers fell, the percentage of offers in August was still an improvement of nearly 10 percentage points compared to the same period a year ago; last year, the percentage of buyers who made offers on homes was down 13.6 percent, compared to this year’s 4.3 percent.
In addition, according to Builder’s Pulse, new home closings fell year-over-year in May in the Chicago area, but the percentage drop was less than that of April 2012, which may also be a sign the market is strengthening. Closings declined 12.6 percent from a year earlier, and new home closings in the same month last year saw a 17.3 percent drop year-over-year in April. The disconnect between the decrease in showings, offers and home closings within this year that are improvements from last year, however, not only signifies a market strengthening very slowly, but also an overall decrease in inventory, which was down nearly 30 percent across the nation in July.
“The fundamental question about the real estate market has been: will it last?” said Redfin CEO Glenn Kelman. “With the summer season now over, would the rise in demand and prices be more than just the kind of temporary rally we saw in 2010 and 2011? Would buyers frustrated by an inventory crunch keep looking for a home? And the answer now clearly is yes, the recovery will continue. The market isn’t booming, but it’s building steadily in ways that have surprised many economists. In the past few weeks, we got the first signal that the winter will be relatively strong, which in turn bodes very well for 2013.”