After observing a slowdown in sales throughout June—typically the peak selling month for the year—online brokerage Redfin reported a rebound in July, though other market indicators continue to cool.
According to Redfin’s data, “this July saw a healthy jump in homes sold throughout most of the 19 markets covered in this report,” improving 3 percent month-over-month and 17.6 percent year-over-year from a rather disappointing July 2012.
In fact, according to the Seattle-based brokerage, July 2013 saw the highest number of homes sold in the past four years, with the 19 markets together seeing about 94,000 sales.
“July’s numbers are probably the result of buyers shaking off the impact of mortgage interest rate increases, and opting to lock in rates before they rise further,” explained analyst Tommy Unger. “Chicago led the nation with
nearly 12,000 homes sold, up a strong 5.7 percent in July, and 36.9 percent year over year.”
While sales numbers picked up, Redfin believes the gains won’t last.
“With less inventory, higher interest rates and continued buyer fatigue, August won’t see the same 7 percent month-over-month sales increase as in 2011 and 2012,” Unger said. “In fact, based on current closed and pending sales, we expect a slight month-over-month drop in home sales for next month.”
At the same time, reports on home price growth and inventory were less positive in July.
Nationally, home prices per square foot were up 1.1 percent from June and 19.3 percent from July 2012, Redfin reported. However, a closer examination shows four of the 19 areas tracked posting monthly price decreases: Austin (-2.6 percent); Washington, D.C. (-2.5 percent); Philadelphia (-1.5 percent); and Boston (-0.9 percent).
Meanwhile, the number of homes for sale in July fell 4.6 percent month-over-month, outdoing the 4 percent drop recorded at the same time last year. Year-over-year, inventory fell 30.6 percent. With the exception of San Jose (which reported a 7.1 percent monthly increase in for-sale homes), inventory was down on a monthly basis in all tracked markets.
“The slight increase in inventory from May to June was partially attributable to the lower sales volume,” Unger said. “Now, it looks like inventory is back on its seasonal decline heading into fall.”
By Tory Barringer