March could suffer from lower home sales

by MPA14 Mar 2014
Lower home sales are anticipated in March, with home tours in February showing sluggish growth.

Redfin data has indicated that home tour requests grew by 1.9 percent across 23 markets between January and February. While tour requests did edge up, the result compares to a 6 percent increase over the same period last year. The rise in signed offers also lagged last year's results, at 17.8 percent in February versus 20 percent last year.

Redfin claimed some of the growth could have been inflated by an increase in the company's own market share, and forecast a soft month ahead for sales.

"The relative softness in the rate of growth leads us to expect home sales to be down in March. That said, Redfin has seen an uptick in demand in the past 10 days, which could be a positive sign for April sales," the company said.

Redfin said the sluggishness could be a result of homebuyers having difficulty adjusting to higher house prices and mortgage rates, particularly on the West Coast.

“This year, there are fewer all-cash buyers and investors in the market. Those that remain are traditional buyers who have tighter budget constraints and are struggling with sticker shock,” Redfin Los Angeles agent Eric Tan said.