SEATTLE--(BUSINESS WIRE)--Redfin (www.redfin.com), the next-generation real estate brokerage, today announced that the Redfin Housing Demand Index increased 9.6 percent to 103 from 94 a year ago.
The Redfin Housing Demand Index is the industry’s first and only measure of homebuyer activity prior to purchase, and is based on millions of visits to Redfin.com home-listing pages and thousands of Redfin customers requesting tours and writing offers in 15 major metro areas.
September and October Forecasts
Redfin’s forecast model, the industry’s earliest forecast of U.S. home values and sales, shows a brief acceleration in September price and sales growth compared to August, then shows October cooling slightly.
Redfin projects that September home prices across 15 major metro areas will rise 5.3 percent year over year, and sales will increase 10 percent. For October, the model forecasts prices to rise 5.1 percent from a year ago and sales to increase 7.9 percent.
Looking Ahead
While September and October look steady, there are early signs that point to a softening market in the final two months of the year. The number of Redfin customers touring homes held steady from July to August, but fewer people actually made offers. In 2014, one in six Redfin customers who requested a tour eventually made an offer. So far this year, it’s one in seven.
Still-low inventory is holding them back. Although newly listed homes increased 10 percent in August, it still wasn’t enough to meet demand. The result was 0.3 percent fewer homes for sale overall in August compared to the same time last year.
This tells us the buyer demand is still very strong, but it takes more effort to find a home. Redfin agents report that sellers are beginning to come to terms with this mindset, and some have started lowering their listing prices.
“Buyers are worried about too-high prices and are more cautious about making offers,” said Karen Krupsaw, Redfin vice president of real estate operations. “We’re seeing that sellers are getting the memo, as more people are dropping their prices in the past few weeks.”
August Forecast Check-In
In August, the median sale price in the 15 metros that compose the Demand Index increased 4.3 percent from a year earlier. Our revised guidance for August was for 3.3 percent growth. August sales were up 7.8 percent year over year against our forecast of 4.6 percent.
To read the full report, complete with data, charts, insights and a full methodology, click or paste the following link: https://www.redfin.com/research/reports/2015/redfin-fall-housing-outlook-sees-healthy-buyer-demand-steady-price-and-sales-growth.html.
Redfin Forecast Models
The price model includes:
- Visits to Redfin.com home listing pages
- Number of Redfin customers requesting home tours
- Number of Redfin customers making offers on homes
- Median price of pending sales
- Median price of new listings
- Median price per square foot of pending sales
- Median sale price
The sales model includes:
- Visits to Redfin.com home listing pages
- Number of Redfin customers requesting home tours
- Number of Redfin customers making offers on homes
- Number of homes for sale
- Number of homes sold
- Number of new listings
- Number of properties that went under contract in the previous 30 days
About the Redfin Housing Demand Index
The Redfin Housing Demand Index is the industry’s first and only measure of housing activity prior to purchase. It is scaled to equal 100 on January 2013, which is the first month of the estimation period. The Demand Index is adjusted for Redfin’s market share growth. This homebuyer activity is used to forecast median sales prices and sales volume two months in the future, which is 30 to 60 days before final closings are tabulated and property transfers are entered into public records.
The Redfin Housing Demand Index is published on the last Tuesday of each month at 8 a.m. Eastern time. Redfin is the only major brokerage to track virtually all of its key customer events in one database.
Currently, price forecasts have a median error of 1.4 percentage points. Homes sold forecasts have a median error of 3.1 percent points. Redfin will continue to improve the accuracy of its price and sales forecast models over time. While the Demand Index currently tracks 15 top metros, Redfin serves more than 80 markets across the U.S. with its own real estate agents.
The Redfin Housing Demand Index covers the following 15 metro-area markets: Atlanta, GA; Austin, TX; Baltimore, MD; Boston, MA; Chicago, IL; Denver, CO; Los Angeles, CA; Oakland, CA; Orange County, CA; Phoenix, AZ; Portland, OR; San Diego, CA; San Francisco, CA; Seattle, WA; Washington, DC.
About Redfin
Redfin (www.redfin.com) is a next-generation real estate brokerage that represents people buying and selling homes. Founded by technologists, Redfin employs a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not just commissions. Redfin.com features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. Redfin also offers online tools, built by its own software engineers, that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed nearly $20 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.
