Winter Weather Dampens Home Sales, Maintains High Prices
Inclement winter weather is impacting the real estate market nationwide, as highlighted in a recent report by Redfin. Despite a steady 5% increase in the median U.S. home-sale price in the first four weeks of January, along with rising asking prices, severe winter conditions have contributed to a decline in pending home sales by over 8% year over year, marking the most significant drop in four months, according to Redfin. The combination of low inventory, down 4% year over year, and the adverse weather conditions has resulted in sluggish sales, with potential homebuyers in affected areas choosing to stay indoors.
The current winter season has witnessed extreme weather patterns, including an arctic freeze, perilous snow and ice storms across the nation, and heavy rain in drought-stricken California. The Midwest, in particular, has experienced near-record lows with subzero temperatures.
Redfin agent Christine Kooiker from Michigan noted, “Real estate is usually slow in the Midwest in the winter, but this year it’s even slower than usual because the weather has been so extreme. Casual house hunters are staying home to avoid the roads — but inventory is low enough that serious buyers are finding a way to see desirable homes. I also believe we’ll get busier as we approach spring.”
In contrast, real estate agents from warmer climates reported more active engagement from buyers and sellers, even with mortgage rates remaining stable in the high 6% range, as indicated by Redfin.
For January 2024, the median home sale price reached approximately $360,000, with metros experiencing notable year-over-year price increases, including Anaheim, California, with a 13.6% jump; New Brunswick, New Jersey, at 13.5%; and Miami, Florida, at 13.3%.
The challenges of winter weather, coupled with low inventory and increased purchasing power, have led to a challenging start to the real estate market in 2024, following a decline in home sales in December, marking the worst year since 1995, according to the National Association of Realtors.