It seems that economy is changing…and markets adjusting to new financial movement.
For home buyers in northern California, speed is the name of the game.
From the top 10 fastest-moving housing markets, 8 are located in California, with San Francisco, San Jose and Oakland taking the top three spots, according to a report from Trulia. At least 70% of homes in these three areas sold in two months or less.
“California has seen very strong job growth, especially in coastal markets,” said Ralph McLaughlin, housing economist at Trulia. Lack of supply in these markets also plays a factor. “The amount of new housing that gets built is relatively small compared to other parts of the country.”
San Francisco, which had a median asking price of $1,099,000 in April, topped the list and has particularly low new construction levels thanks to its topography and building regulations, according to McLaughlin. “The process of adding new supply is more difficult here … for natural and legal reasons.”
Homes in San Francisco are selling fast: 26% are still for sale after 60 days.
The report tracked home sales listed on Trulia in the 100 biggest metro areas in the U.S. on Feb. 5 and were still available on April 5. In addition to the 8 cities in California, Seattle and Salt Lake City, Utah, also made the top 10 list.
Farther south in the Golden State, homes in San Diego are also selling at a rapid pace with 33% of homes listed in February still available 60 days later, down from 44% the year prior.
On a national level, 40% of homes moved off the market in the two-month period, a slight increase from 38% during the same time period in 2014, the report showed. On average, lower-priced homes in the fast-moving markets sold the quickest, with half still on the market after two months.
This means buyers, especially first-timers, need to go into their house hunt prepared, advised McLaughlin.
“Not only is it more difficult to buy where homes are moving fastest, the homes first-timers would buy are moving faster compared to middle and higher-priced homes. It’s a double whammy.”
Overall, housing markets that have experienced strong price gains in the last year have also moved the fastest, McLaughlin added.
Sellers remain in control in many Florida markets as well, with 47% of homes in the Cape Coral-Fort Myers area still for sale after 60 days. Last year, 64% of homes were still on the market in this area during the same time period. West Palm Beach, Fort Lauderdale and Orlando also saw homes selling faster than in 2014.
However, in Miami, buyers might have more of an upper hand with 65% of homes still sitting on the market after two months, compared to 56% last year. “Miami has had a huge condo boom … the end of last year and the start of this year was about the time the condos came to the market,” McLaughlin said. “Compounding that, over the last year-and-a-half, affordability in Miami has dropped.”
Home buyers in Long Island and Albany, New York, can also breathe a little easier in their search, as 69% and 71% of homes, respectively, were still on the market after two months.
|Rank||Metro||Homes still for sale after 2 months April 2015||Homes still for sale after 2 months April 2014|
|1||San Francisco, CA||26%||28%|
|2||San Jose, CA||30%||31%|
|4||San Diego, CA||33%||44%|
|5||Orange County, CA||41%||45%|
|8||Los Angeles, CA||43%||45%|
|9||Ventura County, CA||43%||50%|
|10||Salt Lake City, UT||45%||51%|
However, home buyers in some other markets have the upper hand as it continues to be a sellers’ market in many areas of the country, but that doesn’t mean buyers everywhere are out of luck.
So the top housing markets for buyers are Philadelphia, Chicago and Cleveland, according to a report from Zillow. In these markets, inventory tends to be strong and homes stay on the market longer and often experience price cuts, which gives buyers more bargaining power.
Miami-Fort Lauderdale, Providence, Detroit and Pittsburgh also made the list.
“There is a definite feeling that things are easing,” said Skylar Olsen, a senior economist at Zillow. “We are heading toward better balance. Buyers will be able to take a little more time this year compared to last year.”
She added that there are some areas within the buyers’ markets that can still favor sellers.
Tight inventory throughout the country helped push home prices up 4.5% in January from the year prior, according to the S&P/Case-Shiller U.S. National Home Price Index.
But homes in the top 10 buyers’ markets are selling for nearly 4% less than the list price on average, according to the Zillow report. In sellers’ markets, buyers get an average discount of less than 1%.
On average, homes in the top sellers’ markets sell nearly 43 days faster than homes in the top buyers’ markets, according to Zillow.
To determine the rankings, Zillow analyzed sale-to-list price ratios, the number of price reductions and days on market in metro areas across the U.S.
“Where the sale-to-list price ratio is low and discounts are high, many listings go through formal price cuts and it generally take longer to sell homes,” Olsen said.
Olsen said that many of the buyers’ market cities have had a slowdown in growth, and didn’t experience the tech and energy job booms. “Top buyers markets were generally in areas that were once founded on manufacturing jobs, which have slowed and not returned in earnest.”