Home sales saw a substantial surge in October, according to real-time data from technology-powered real estate broker Redfin.
According to Redfin’s Real-Time Home Price Tracker for October 2012, home sales increased 9.8 percent across 19 major U.S. markets from September to October, an unusual gain in a month that commonly sees monthly declines of at least 5 percent. Compared to October 2011, sales were up 21.8 percent.
While October’s increase was unusual, it was not unexpected. According to Tim Ellis, blogger and analyst for Redfin, the company’s Real-Time Demand Pulse for September predicted an increase in sales volume based on the number of customers requesting home tours and writing offers the previous month.
Unfortunately, the Real-Time Demand Pulse for October showed a decline in home tours and signed offers, leading Redfin to predict a slowdown in sales to close out the year.
Meanwhile, the share of new listings that went under contract within 14 days bumped up two percentage points to 28.2 percent, its highest level since May.
At the same time, the market so no relief as far as inventory concerns. According to Redfin, the total number of homes for sale was down 29.4 percent in October compared to a year earlier, dropping to less than 200,000 total listings across the 19 metros covered in the report.
Prices also increased in October, though on a more modest scale. The tracker reported price increases of 8.4 percent year-over-year and 0.4 percent month-to-month.
Seventeen cities reported higher prices than a year earlier, two more cities than in September. Fourteen of the 19 metro areas measured posted increases from September, up from only eight in the previous report.
According to Redfin CEO Glenn Kelman, October’s price increase is the result of basic economic theory.
“With supply low, and the economy slowly improving due to record-low interest rates, demand has increased,” Kelman said. “Household formation is now at a record high. High demand and low supply drive prices up.
“The $64,000 question is whether more people will list their homes for sale in 2013. Based on the conversations our agents have been having with homeowners, we think they will,” Kelman added. “We also believe that demand among home-buyers will increase, though that prediction has become less certain late in the year: almost no new Redfin customers are touring homes right now, fewer even than last year. But those who have been touring are writing offers at record levels. Everyone wants to get married on the first date.”
Prudential California Realty