Home prices rose higher in December than they did in the 22 months prior, posting an 8.8 percent year-over-year increase, according to Redfin, a real estate brokerage. There were also fewer homes for sale in December than in any other month of 2015 (down 5.4 percent year-over-year), but despite this lack of inventory, sales were up 7.7 percent.
Home prices dodged the typical December slow-down and spiked last month because of a dearth of properties on the market. In December, there was a three-month supply of homes for sale, a steep slide from the 4.1 months reported in November and far from the six months that signals a balanced market. The lack of inventory supported a fast market, where the typical home sold in 41 days, a week faster than a year ago.
The 7.7 percent year-over-year increase in sales, compared with 2.8 percent the previous month, continued a recent pattern of sales rebounding in December from November. In 2014, December sales grew 9.7 percent after dropping 0.7 percent in November. This trend casts doubt on the theory that the new TILA-RESPA Integrataed Disclosure rule had a significant impact on November or December sales volume.
In total, there were nearly 2 million homes sold in 68 markets tracked by Redfin in 2015, leading to a strong 9.6 percent increase from 2014.
Local market insights in December
- The median sale price in Hudson Valley, N.Y., climbed 15.1 percent from November, posting the biggest gains of any market. Year-over-year, prices were up 6.3 percent.
- Sales rebounded across the country in December from November, with 64 of 68 markets posting double-digit, month-over-month increases. San Jose, Calif., (71 percent); San Francisco (29.7 percent) and Nashville, Tenn. (20.2 percent) had the biggest increases compared with last year.
- Denver and Oakland, Calif., tied for the fastest markets, with half of all new listings selling in 18 days or less, followed closely by Seattle, where the typical home sold in less than three weeks.
- New listings surged at year end in Miami (58.3 percent) and Fort Lauderdale, Fla. (26.9 percent), where sellers see demand from vacation homebuyers. New for-sale listings were up 80.4 percent in Miami from a year ago; sellers put more properties on the market in December than in any other month of 2015. Inventory in Miami is up 11.3 percent year-over-year.