Market Overview

Redfin July Forecasts Hit the Mark as Housing Demand Cools for Fourth Consecutive Month


Redfin (, the next-generation real estate brokerage, today announced that the Redfin Housing Demand Index, the industry's first and only measure of homebuyer activity prior to purchase, decreased 5 percent in July, falling to 108 from 113 in June, the fourth consecutive month-over-month decline. Redfin real estate agents report that the market is rapidly cooling, with buyers reaching their limit on prices and showing less interest in hot home listings.

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In Denver, where half of new listings sell in six days or less, Redfin agents and their customers are seeing the slowdown first hand.

"It feels like the market is at a standstill," Redfin agent Michelle Ackerman said. "Showings have dropped off significantly." Ackerman recently put a home on the market for less than $300,000 in one of the city's top-rated school districts. She expected 30 showings in the first weekend and three offers. She got nine showings and one offer.

August and September Forecasts

Still, homebuyer demand was up 9 percent year over year in July, leading Redfin's Forecast Model, the industry's earliest forecast of U.S. home values and sales, to project that in August, home prices across 15 major metro areas1 will rise 2.2 percent and sales to increase 2.6 percent year over year. The model forecasts that in September, prices will increase 5.3 percent and sales will rise by 10 percent from last year. Based on home price data from the first 24 days of August and the fact that September projections are so strong, Redfin analysts expect the actual home price growth for August to be a point or two higher than the 2.2 percent forecasted increase.

July Forecast Check-In

Using Redfin demand data through mid-July and housing metrics from 15 major metro areas1, Redfin forecasted July home prices and sales on July 23.

In July, the median sale price increased 4.6 percent from a year earlier, compared to Redfin's July 23 forecast of 4.3 percent growth. The Redfin sales forecast for July was also on target, with sales up 14 percent year-over-year against our forecast of 14.3 percent.

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Redfin Forecast Models

The price model includes:

  1. Visits to home listing pages
  2. Number of Redfin customers requesting home tours
  3. Number of Redfin customers making offers on homes
  4. Median price of pending sales
  5. Median price of new listings
  6. Median price per square foot of pending sales
  7. Median sale price

The sales model includes:

  1. Visits to home listing pages
  2. Number of Redfin customers requesting home tours
  3. Number of Redfin customers making offers on homes
  4. Number of homes for sale
  5. Number of homes sold
  6. Number of new listings
  7. Number of properties that went under contract in the previous 30 days

About the Redfin Housing Demand Index

The Redfin Housing Demand Index is the industry's first and only measure of housing activity prior to purchase. It is scaled to equal 100 on January 2013, which is the first month of the estimation period. The Demand Index is adjusted for Redfin's market share growth. This homebuyer activity is used to forecast median sales prices and sales volume two months in the future, which is 30 to 60 days before final closings are tabulated and property transfers are entered into public records.

The Redfin Housing Demand Index is published on the last Tuesday of each month at 8 a.m. Eastern time. Redfin is the only major brokerage to track virtually all of its key customer events in one database.

Currently, price forecasts have a median error of 1.2 percentage points. Homes sold forecasts have a median error of 2.8 percent points. Redfin will continue to improve the accuracy of its price and sales forecast models over time. While the Demand Index currently tracks 15 top metros, Redfin serves more than 60 markets across the U.S. with its own real estate agents.

1 The Redfin Housing Demand Index covers the following 15 metro-area markets: Atlanta, GA; Austin, TX; Baltimore, MD; Boston, MA; Chicago, IL; Denver, CO; Los Angeles, CA; Oakland, CA; Orange County, CA; Phoenix, AZ; Portland, OR; San Diego, CA; San Francisco, CA; Seattle, WA; Washington, DC.

About Redfin

Redfin ( is a next-generation real estate brokerage that represents people buying and selling homes. Founded by technologists, Redfin employs a team of experienced, full-service real estate agents who are advocates, not salespeople, earning customer-satisfaction bonuses, not just commissions. features all the broker-listed homes for sale, as well as for-sale-by-owner properties that don't pay brokers a commission. Redfin also offers online tools, built by its own software engineers, that make the entire process of buying or selling a home easier and more fun. The company serves major markets across the U.S. and has closed nearly $20 billion in home sales. In 2012, Redfin was named one of The DIGITAL 100: World's Most Valuable Private Tech Companies by Business Insider.

Redfin Journalist Services
Rachel Musiker, 206-588-6863
Nela Richardson, Ph.D., Chief Economist, 206-435-7264
Antonio Kirson. Ph.D., Senior Data Scientist, 206-435-7292

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