In modern history, the housing market has never seen a month like March. Record demand and the lowest levels of inventory on record pushed sales prices to record highs in March and made life very complicated for buyers, real estate agents, builders and lenders across the United States.
The national median home-sale price hit a record high of $353,000 in March — up 17% from 2020 — according to a new report from Redfin. Active listings — the count of all homes that were for sale at any time during the month — fell 29% year-over-year to their lowest level on record. This was the largest year-over-year drop on record, and the 20th straight month of declines.
Prospective homebuyers, real estate agents and homebuilders have felt the effects of low inventory for months now. The high cost of building materials has crippled general contractors and new-build progress, and hundreds of thousands of homeowners who ordinarily would have listed their homes, have stayed put.
Combined with the normal frenzy that a spring buying season brings, the demand for existing homes has never been higher.
The housing market set several other records in March, including the amount of time it took a home to sell (25 days on average, a new low, and 19 days faster year-over-year), the amount of homes sold above asking price (42%, a new high), and the average sale-to-list ratio, which measures how close homes are selling to their asking prices (over 100% for the first time ever).
In spite of the crazed demand, officials don’t believe all homes are being overvalued.
“Despite the intense competition and high prices we face, I still see more big gains to be made in home equity,” said Taylor Marr, Redfin lead economist. “Fundamentals like low mortgage rates and high demand for housing are fueling the record-high price gains, so I don’t believe that homes are overvalued. Waiting for the market to cool could take many months, and at that point we may have missed out on the opportunity to benefit from these super-low mortgage rates and price gains in the year ahead.”
Median sale prices increased year-over-year nearly across the board in local housing markets. The only places prices didn’t increase were Honolulu, where they fell 4.7%, and San Francisco, where they were down 1.6%, per Redfin. The largest price increases were in Austin, Texas (+28%), Fresno, California (+23%) and North Port, Florida (+23%).
The largest gains in sales were in New York (+58%), San Jose, California (+56%) and San Francisco (+55%). The metro areas where home sales fell the most were Rochester, New York (-9%), Grand Rapids, Michigan (-9%) and Dayton, Ohio (-7%).
Interestingly, four California cities – San Francisco (+34%), San Jose (+20%), Oakland (+8%), and Los Angeles (+3%) – all posted a year-over-year increase in the number of seasonally-adjusted active listings of homes for sale. This follows a trend that began in early 2020, as people continue to move out of crowded, expensive cities (especially in California) and into smaller, secondary cities that offer more square footage at reasonable prices.
The biggest year-over-year declines in active housing supply in March were in Salt Lake City, Utah (-66%), Baton Rouge, Louisiana (-59%) and Allentown, Pennsylvania (-52%).
Denver was the most aggressive market, with half of all homes listed as “pending sale” in just five days, down from nine days a year earlier. Tacoma, Washington and Grand Rapids, Michigan were the next fastest markets with five and six median days, respectively, on the market, followed by Omaha, Nebraska (six) and Portland, Oregon (six).