This story was originally published in Builder.

Home prices finished the year strong, up 6.8 percent in December from last year, according to Redfin.

The median sale price was $287,000 across the markets Redfin serves. Sales were down 2.8 percent ending a year of fluctuating sales growth. The number of homes for sale declined 14.5 percent compared to a year ago, marking 27 months in a row of inventory declines. The typical home that sold in December found a buyer after 49 days on the market, five days fewer than 2016.

"Like last year, low inventory will be the biggest driver of the 2018 real estate market," said Redfin chief economist Nela Richardson. "Major housing market dynamics don't shift dramatically when the clock strikes midnight on Jan. 1. We anticipate a continuation of the same trends we've been seeing for the past few years. Price growth will remain strong as many homeowners will remain deterred from selling due to the low mortgage rates they've locked in and the high price of their would-be move-up home."

The number of homes newly listed for sale in December decreased 3.0%. With just 2.6 months of supply in December, the market was far below the six months of supply that represents balance between buyers and sellers.

Market Summary
December 2018
Median sale price
Homes sold
New listings
All Homes for sale
Median days on market
Months of supply
Sold above list
Median Off-Market Redfin Estimate

Average Sale-to-list

Facing Lowest Supply on Record, San Jose Prices Rose 31.9 Percent Year Over Year

San Jose had only 0.5 months of supply in December, the lowest monthly supply Redfin has recorded in any metro area. This means that if the pace of home sales continued and no new homes were listed, it would only take about two weeks for all the homes currently for sale to find buyers. Seattle and Oakland also faced extremely tight markets with just 0.6 months of supply in December.

Unsurprisingly, San Jose was the fastest and most competitive market in December with the typical home finding a buyer in a median of 12 days, followed by Seattle and Oakland at 15 and 16 days respectively. More than three-quarters (76.2 percent) of San Jose homes sold above the list price. Of all the metro areas Redfin tracks, San Jose has had the steepest year-over-year price growth and inventory declines for three months in a row.

Redfin San Jose agent Kalena Masching says that despite the high prices (her market had a median sale price of $1.1 million in December) San Jose remains more affordable than San Francisco.

"Even highly-paid tech workers are priced out of San Francisco and moving to San Jose. This demand coupled with low inventory and job growth at the tech campuses in the South Bay has caused prices to soar."

Other December Highlights


· San Jose was the fastest market for the third month in a row, with half of all homes pending sale in just 12 days, down from 39 days in December 2016. Seattle and Oakland were the next fastest markets at 15 and 16 median days on market, followed by Boston (20) and San Francisco (21).

· San Jose was again the most competitive market with 76.2 percent of homes selling above list price, followed by 68.8 percent in San Francisco, 62.1 percent in Oakland, 40.2 percent in Seattle, and 38.8 percent in Los Angeles.


· San Jose had the nation's highest price growth for the third month in a row, rising 31.9 percent since last year to $1.108 million. Las Vegas had the second highest growth at 17.3 percent year-over-year price growth, followed by Baton Rouge, La. (15.3 percent), Seattle (15 percent), and San Francisco (14.7 percent).

· Two metros saw price declines in December: Albany, N.Y. (-3.2 percent) and Camden, N.J. (-0.7 percent).


· Five out of 73 metros saw sales surge by double digits from last year. Camden, N.J., led the nation in year-over-year sales growth, up 21.3 percent, followed by Louisville, Ky., up 14.5 percent. Orlando, Fla., rounded out the top three with sales up 14.2 percent from a year ago.

· Cincinnati saw the largest decline in sales since last year, falling 20.8 percent. Home sales in Portland, Ore., and Oxnard, Calif., both declined by 15.6 percent.


· San Jose had the largest decrease in overall inventory for the third month in a row, falling 51.5 percent since last December. Oakland (-36.4 percent), Seattle (-34.0 percent), and Atlanta (-33.1 percent) also saw far fewer homes available on the market than a year ago.

· Baton Rouge, La., had the highest increase in the number of homes for sale, up 12.8 percent year over year, followed by New Orleans (6.8 percent) and Austin, Texas (5.2 percent).

This story was originally published in Builder.