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TH E M R EP O RT | 47 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Is Home Seller Enthusiasm Waning? Sellers slow to list, despite continued buyer interest, according to housing market analysis. A report from Redfin shows that home sale prices in March were still on the way up— they were 9 percent higher than a year ago, closing the month at a median $297,000 nationally. But homes for sale were down across the board as well. Compared to March 2017, the number of homes on the market in the United States was down 12 percent. More telling, the number of newly listed homes fell 5.6 percent from last year, something Redfin classifies as "a sign of possible waning seller enthusiasm and ongoing tight market conditions." Redfin Chief Economist Nela Richardson said one explana- tion for the drop off in housing movement this March might have been the fact that Easter came so early. "Sellers are slow to list this year and we aren't seeing enough new construction homes to fill the gap," Richardson said. "If we don't see the new listings number turnaround next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year." If seller enthusiasm is wan- ing, buyer demand is still strong. According to Redfin, the typical home went under contract in 43 days in March. That's eight days faster than a year earlier and faster than any March on record. Among homes that sold in March, 24 percent sold above their list price, up from 22.3 percent last March. One in five homes that sold in March went under contract within two weeks of their debut, compared to 18.4 percent last year. The Bay Area had much higher numbers than the average, though. In San Jose, 83 percent of houses sold above list price. In San Francisco and Oakland, three-quarters of houses sold higher than listed. Seattle (for the second month in a row) and Denver were the fastest-moving markets in the country. Houses there were on the market for a median of just seven days in March. The Bay Area also saw houses close in less than two weeks. As is typically the case, prices grew most in the Bay Area. San Jose saw prices leap by 32 percent from a year ago; San Francisco almost 17 percent. But less-typical markets showed price growth as well. Allentown, Pennsylvania, saw prices climb 22 percent since last year, just 1 percent more than the prices in Detroit. At the same time, inventory dropped in 65 of the 73 most populous metros Redfin tracked. In 48 of those metros, inventory fell more than 10 percent com- pared to last year. Baton Rouge; Washington, D.C.; and Allentown bucked the declining inventory trend, respectively adding 26.6 per- cent, 11.8 percent, and 11.4 percent to housing supply from last year. Single-family Home Building Slips The crowded housing market is finding little relief in one of its most important inventory markets. S ingle-family housing starts slipped 3.7 percent in March, recording only 867,000 units for the month according to data on monthly residential construction in March released by the U.S. Census Bureau and the U.S. De- partment of Housing and Urban Development. Overall housing starts in March rose 1.9 percent to 1.3 million units, while building permits increased 2.5 percent to approximately 1.3 million units and were 7.5 percent above the rates during the same period last year, the report said. Permits for single-family homes slipped 5.5 percent below the February rates to 840,000 units. Home completions also remained below the estimated numbers for single-family housing, slipping 4.7 percent below the February rates to 841,000. "Single-family starts are the key to replenishing our severely depleted housing inventory," said Danielle Hale, Chief Economist, at Realtor.com. "Last month's single- family starts are less than half of what we saw during the peak in early 2006 and roughly 30 percent below normal. As single-family starts lag, for-sale inventory re- mains limited. Realtor.com March data shows inventory is 8 percent lower and prices are 8 percent higher than last year." According to Tendayi Kapfidze, Chief Economist at LendingTree even as multifamily housing starts are accelerating, single-family starts have lost momentum continuing to remain below the 900,000 mark, a trend that has been continuing for the past five months. "The change towards multi-fam- ily could be the initial signs that af- fordability is starting to impact the mix of construction," said Kapfidze. "Multi-family units are at lower price points and include significant rental units. Notably, single-family starts are particularly weak in the high-cost Northeast that is also the most exposed region to the negative impacts of the tax plan." Despite these headwinds, the housing market will continue to grow as builder confidence re- mains high and construction jobs show an uptick. "Two important trends signal that some modest relief for the housing supply shortage is on the way—the continued year-over-year growth in completions means more homes on the market in the short- term and the dramatic rise in con- struction employment this month indicates housing construction is likely to increase in the months ahead," said Mark Fleming, Chief Economist at First American. "Inventories are constrained in both the new home and existing markets. The 3-month average single-family building permits were the highest since 2007 as build- ers respond to the high demand," said Kapfidze. "Builder confidence is high and construction jobs are increasing, all of which are encour- aging signs. The tax plan will also increase builder margins by 10-15%, encouraging more activity includ- ing at the lower end which has been underserved in the recovery." "The number of residential con- struction jobs is now 4.5 percent higher than a year ago and this growth supports further improve- ment in the pace of home build- ing," said Fleming. "The continued year-over-year growth in comple- tions means more homes on the market in the short-term and the dramatic rise in construction employment this month indicates housing construction is likely to increase in the months ahead." "Sellers are slow to list this year and we aren't seeing enough new construction homes to fill the gap." —Nela Richardson, Chief Economist, Redfin