Monthly home sales in December fell by the largest margin since May 2020, according to a new report from Redfin, with the decline attributed to a lack of supply rather than interest.
Seasonally adjusted homes sold fell 3.6% to around 579,300 in December, the sharpest drop since the first months of the pandemic. According to the report, December figures were also down 10.7% year-on-year, the largest annual decline since June 2020.
Seasonally adjusted active listings — the number of all homes for sale at any one time during the month — also fell 3.2% monthly and 18.9% year-on-year to an all-time low in December, while new listings fell 2.2% compared to November. 4% and fell 13.4% below last year's level.
"Home sales are collapsing, but not because of a lack of demand," Redfin chief economist Daryl Fairweather said in a press release. “There are many homebuyers on the hunt, but there is simply nothing for sale. In many markets, buying a home feels like walking into a grocery store only to find the shelves empty.”
Stock shortages also kept prices at elevated levels, which are up 15.2% since December 2020, with the median at $382,900. December was the 17th consecutive month of annual double-digit increases.
In a real estate market characterized by eager buyers and reluctant sellers, Nassau County, New York saw the largest annual decline in homes sold among the 88 metro areas tracked by Redfin, with sales down 22.3% from 12 months earlier . Two other cities in the region followed. Home sales in New Brunswick, New Jersey, were down 21.6% and Albany, New York, was down 20.8% on a year-on-year basis. West Palm Beach, Fla., and Anaheim, California rounded out the "Top 5" with sales down 20.7% and 19.8%, respectively.
At the other end of the scale, Southeastern cities topped the list among the relatively few markets to see year-over-year increases in sales. Greenville, South Carolina, posted a 9.4% annual gain, followed by Greensboro, North Carolina at 7.9% and Baton Rouge, Louisiana at 7%. Milwaukee followed with 5.5%, and fifth place went to Honolulu and Tulsa, Oklahoma, with 3.8%.
The trends seen toward the end of 2021 are likely to continue in the near term, Fairweather said. She recently noted that higher interest rates could also affect purchasing decisions, urging them to act quickly in 2022.
"In January, I expect more buyers and sellers in the market, but demand will outpace supply — which will push prices higher early this year."
Although increased demand is likely to continue, December data suggests that competition for home buyers is easing slightly across the country, especially compared to the hot summer of 2021. Homes stayed on the market longer – compared to a record low of 24 days on average increased to 15 in June. A year ago houses were listed for an average of 31 days before they were sold.
Homes were also less likely to sell above list price. In December, 43% of homes were purchased above list price, compared to 57% in June, but still up 34% year-on-year.
Austin, Texas led the country in annual home price growth, with values rising 30.3% to $482,149. North Port, Florida posted the second-highest increase at 28.4% compared to 12 months earlier, followed by other sun belt markets of Phoenix at 28%, Tucson, Arizona at 25.6% and Raleigh, North Carolina at 25.4 %.