While the phrase “not out of the woods yet” is still used, Redfin economists say the market probably hit its cycle-low trough the second week of Nov. 2022.
SEATTLE – The housing market has begun to recover after hitting a low point in the second week of November, according to a report from Redfin.
The reason for Redfin’s estimation: The number of its customers requesting first tours has improved 17 percentage points from the November trough, and the number of people contacting agents to start the buying process has improved 13 points. Year-to-year, home tours and service requests are down 23% and 27% respectively, but that’s still an improvement from the November when both were down 40%.
Polled Redfin agents report that bidding wars are even back in some markets, including Central Florida, along with Seattle and Richmond, Virginia. Demand is still down from early 2022 highs, but Redfin calls it a “new phase” and says well-priced listings sell quickly.
Homebuyers return
In fall 2022, many buyers saw their dreams disappear when mortgage rates rose about 7%. But as a result of acclimating to 7% rates, recent drops closer to 6% now seem to more buyers like an unexpected opportunity. Some qualified buyers are even managing to score a rate in the high 5-percent range now.
“I’ve seen more homes go under contract this month than in the entire fourth quarter. Listings that were stagnant in November and December are suddenly getting one to two offers,” says San Jose Redfin agent Angela Langone.
Mortgage applications are up 28% compared to early November, and the typical homebuyer’s mortgage payment is down 10% (about $180) since fall.
The rise in demand has even led to bidding wars in selected metros. Eric Auciello, Redfin’s team manager in Tampa, has seen three modest single-family homes priced around $300,000 wind up in bidding wars in central Florida this month, with 16, 17 and 23 competing offers, respectively.
Further south, in Palm Beach, most well-priced homes are getting multiple offers, but competition is nowhere near 2021 levels, according to local Redfin agent Elena Fleck: “Homes in coveted locations with recent upgrades or renovations – those are the homes getting multiple offers.”
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