February 2025 Sees Notable Rise in Home Sales as Spring Market Approaches

February 2025 Housing Market Report

Recent data from RE/MAX illustrates a promising start to 2025 in the housing sector, with February recording an impressive 8.4% increase in home sales over the previous month of January. This uptick is notable, especially considering it accounts for about half of the average month-to-month sales gains witnessed in comparable previous Februarys, despite showing a 2.6% decline from sales figures recorded one year ago.

The increase in sales comes as the market gears up for the typically robust spring selling season, which has averaged a staggering 31% jump in sales over the last three years in March. The median sales price for homes in the 52 metropolitan regions tracked by RE/MAX stood at $423,000 for February, reflecting a modest rise of $3,000 (0.6%) from January and an increase of nearly $13,000 (3.1%) year-on-year.

In February, housing inventory also showed a growth trend, climbing 2.9% compared to January. This marks an upward trajectory with inventories enhancing month-over-month for the last 10 out of 12 months, now standing 33.9% higher than February 2024. However, new listings saw a contrasting dip of 3.0% from January, juxtaposed with January's significant jump of 53.7%.

Erik Carlson, CEO of RE/MAX Holdings, noted, "As is expected ahead of the spring market, February's increase in home sales signifies a positive direction as we approach the peak selling season. Ensuring ample inventory is crucial for buyers, and current trends are showing improvement in that area." In a revealing market observation, San Diego, California, recorded the largest year-over-year boost in new listings, exceeding 50%.

Market analysts attribute the recent surge in activity to pent-up demand paired with favorable interest rates. Carlson emphasized the importance of local market knowledge, stating that the real estate landscape can vary significantly by region. He urged potential buyers and sellers to consult with knowledgeable advisors who understand local nuances for effective navigation of these fluid market conditions.

Key Market Insights

1. Close-to-List Price Ratio: Buyers achieved approximately 99% of the asking price in February—an increase from 98% in January, remaining unchanged from the previous year's figures.
2. Days on Market: Properties sold took an average of 51 days to close, a slight decrease from the preceding month's average but six days longer than February 2024.
3. Months' Supply of Inventory: This figure measured at 2.7 months, down from 2.9 in January but a substantial increase from 1.9 in February of the previous year.

Yearly Trends in New Listings
Out of the 52 regions surveyed, new listings remained steady with a 0.1% increase from February 2024 but decreased by 3.0% month-over-month. Bozeman, Montana, suffered the steepest decline in new listings year-over-year with a 27% drop, while San Diego soared with a 51.7% gain.

Closed Transactions
During February 2025, closed transactions showed a 2.6% decline from the previous year, yet were up significantly from January. The areas experiencing the sharpest declines in closed transactions included Trenton, New Jersey, and Richmond, Virginia, whereas Omaha, Nebraska, and Coeur d'Alene, Idaho, saw the most significant growth.

Median Sales Price Developments
The median sales price for homes across the surveyed regions rose by 3.1% from last February, with Milwaukee and Burlington marking the most substantial increases year-over-year.

Overall, February 2025's real estate landscape indicates a strengthening market as it approaches the vibrant spring selling season, characterized by increased sales activity, slight price inflation, and growing inventories, thus presenting a more favorable environment for prospective home buyers and sellers alike.