|Housing demand spiked to a level not seen since 2013 in December, according to new data from Redfin.
Redfin’s housing demand index index went up by 15.1% to a seasonally adjusted level of 124 in December – the highest level recorded since the company started tracking demand in the beginning of 2013.
Homebuyer demand increased by 26.3%over December 2015, and Redfin noted significant year-over-year increases in homebuyers requesting tours (36.4%) and offers by buyers (10.2%).
“In general, buyers are attracted to brand-new listings,” said Redfin chief economist Nela Richardson. “In December, we started seeing homes that spent time on the market, perhaps because they were not in the hottest neighborhood or needed renovation, finally get offers. Based on the number of sellers who’ve contacted Redfin this month, we expect a sizeable increase in new listings in the next two months. With new listings on the way and this year’s buyers willing to take a look at older inventory, we anticipate that sales in early 2017 will be strong.”
San Francisco had the biggest demand increase with an index of 114.1, versus 102 in December 2015. For three consecutive months, San Francisco has had levels over 100 – an indication of its homebuyer demand normalizing despite an unsteady 2015 and 2016.
“In 2015 at this time, we were at a peak in pricing in San Francisco. Buyers were discouraged because they weren't sure if prices were going to continue to climb or if they were going [to] fall,” said Winnie Lai, a Redfin real estate agent in San Francisco. “This year, prices are more stable and with interest rates spiking after the election, we have people wanting to jump in the game before rates go higher.”