Homes sold faster this March than any other March in seven years, thanks to rising demand and still-shrinking inventory, according to Redfin’s recent housing market report.
Home sales jumped 9 percent in March when compared with March 2016, even as the number of homes for sale fell by 13 percent since the same time last year. It’s the 18th consecutive month that homes for sale have dropped, according to Redfin. Homes for sale in Boston fell by nearly 30 percent in March compared to last March, the second highest drop and only slightly behind Seattle.
The tight inventory and strong demand is not only boosting sales volume and sale prices – it’s also causing homes to be bought in record time. The typical home went under contract in 49 days in March, down from 60 days at this time last year and the shortest span for March since Redfin began recording the data in 2010. Almost one-in-five (19.1 percent) listed homes went under contract within two weeks.
Tough time for buyers
Competition for the available homes led to a national median sales price of $273,000, up 7.5 percent year-over-year and a nearly 5 percent increase from February. Nearly 22 percent of homes sold for more than their list price, Redfin reports.
While the stiff competition and bidding wars are good for sellers, it’s a brutal market for buyers – and the problems will likely hamstring the market moving forward.
“At some point consumer budgets will stagger behind the fast pace of price appreciation,” Nela Richardson, Redfin’s chief economist, told CNBC. “The combination of low inventory, high prices and strong competition will continually challenge first-time buyers this year and they are the cornerstone of the housing market.”
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