Redfin Sees Potential Early Warning Signs of a Cooling in the Red-Hot Housing Market

Redfin, the Seattle-based technology-powered real estate brokerage, is reporting that in the 4-weeks ending May 30, 2021, both pending sales asking prices began to decline or flatten. Redfin noted that some of the key takeaways for the time period could be potential signs that the housing market might be cooling down: 1) Pending home sales fell -3% from the four-week period ending May 2, compared to a 2% increase over the same period in 2019. However, compared to 2020, they are up 38%. 2) Asking prices fell $2,500 from the four-week period ending May 23 to a median of $354,975, up 11% from the same period in 2020. 3) New listings of homes for sale were down -8% from the same period in 2019, and are down -5% from the 2021 high, which was set during the four-week period ending May 2. During the same period in 2019, new listings fell 2%. 4) Active listings (the number of homes listed for sale at any point during the period) fell -37% from the same period in 2020. However, homes continue to sell quickly, on average in 16-days, and even with a modest lowering of prices are selling well beyond 2019 – 2020 levels.

In a statement prepared for the release of the report, Daryl Fairweather, Redfin’s chief economist said, “The housing market was going 100 miles per hour and now it’s down to 80, This is not the bursting of a bubble. Rather, it’s a sign that consumers might rather spend their time and money on other things besides housing now that travel, dining and entertainment are resuming in full force.”