Davel5957/iStock; realtor.com
It’s (almost) time to put away the ice scrapers and banish that bulky, battered winter coat to the rear of your closet. Spring is here—and it’s not just the mercury that’s heating up. This is the unofficial kickoff to the home-buying season, when buyers come out of hibernation and start hitting the open houses in earnest. And this year’s spring market is extra significant, since it will tell us whether the recent slowdown in home sales and price appreciation is just a fluke—or the new normal.
But while everyone is obsessing over prices, prices, prices, we’re taking a deep dive this week into lesser-known waters, a (data) stream that can help bring the big picture into focus, warts and all: how long it takes homes to sell. After all, when there’s way more demand (eager buyers!) than supply (homes for sale!), it means places fly off the market in mere days—terrific for sellers, not so much for buyers. A more leisurely paced market indicates a slowdown, and that translates into opportunities for price-conscious buyers to window-shop and negotiate while sellers cool their heels, and get a wee bit nervous.
So where are homes selling the fastest—and the slowest? To find out, our data team looked at how long it took homes to sell in the 250 largest metropolitan areas* on realtor.com® from March 2018 through February 2019.
Here’s what we learned: Nationally, we do indeed seem to be moving closer to a true buyer’s market. For four consecutive years through 2018, the length of time it took to sell a home fell. But this February the typical home sat on the market 83 days, unchanged from last year. It’s a telltale sign of a market that’s pumping the brakes, if not yet slamming into reverse.
But we continue to be a nation of housing haves and have-nots. While homes are disappearing off the market in around 30 days in the fastest-moving market, they are taking a positively pokey 131 days to sell in the slowest.
Still, the gap is closing! Many of the places where homes are selling the fastest are the nation’s most expensive coastal markets—the very places becoming overheated, where days on market are inching up. Meanwhile many of the places where homes sit on the market the longest are smaller Midwestern and Southern markets where home prices have long lagged, but are now starting to see such much needed improvement and homes sell a tad faster.
The churn is leading to opportunities—and challenges—for eager home buyers, says Chief Economist Danielle Hale of realtor.com. “In a lot of these markets you can probably negotiate on price more than you could a year ago,” she says.
But it cuts both ways: “In a fast-moving market, you need to move quickly. A home you saw one week might be gone the next.”
So, first, where do buyers need to be ready to pounce?
Markets where homes sell fastest
Tony Frenzel
1. San Jose, CAMedian list price: $1.1 million
Median days on market: 30.1
Change in days** on market: +8 days
San Jose, CA
SpVVK/iStock
Yes, the epicenter of America’s booming tech biz remains the most competitive market for real estate. But paradoxically enough, it’s also nucleus of the nation’s real estate slowdown. Still following us?
“Santa Clara County [home to San Jose] was probably the hottest, most competitive market in the country. However, since midsummer 2018 it became the market in the [San Francisco] Bay Area that cooled off the most,” says Patrick Carlisle, Bay Area chief marketing analyst at the real estate firm Compass.
Median home prices in the metro fell 10% in February year over year—or more than $100,000. In the meantime, the number of homes for sale on the market has climbed 124%.
But let’s get real: The pace of San Jose’s market is less frantic than it was a year ago, but buyers still better be ready to act fast. Most homes that go up for sale have a new name on the deed within a month. And sellers in this market, especially those in Palo Alto and Mountain View, where Google is based, still hold all the power.
“Buyers in the Bay Area have been trained to act quickly,” Carlisle says.
2. Salt Lake City, UTMedian list price: $397,000
Median days on market: 37
Change in days on market: +8 days
Salt Lake City
AndreyKrav/iStock
While both urban and suburban homes are still selling fast in this outdoor lover’s paradise, they spend a bit more time on the market than they did at the same time last year—eight more days, to be precise. Still, there’s no shortage of buyers hungry to get into the market here, and they have plenty of attractive options.
Unlike many Western cities, Salt Lake City has many new homes going up. In fact, about 1 in 3 homes on realtor.com in that market is new construction. At a median price of $389,000, these new homes actually cost less than existing homes in the market, despite typically having an extra 400 square feet.
3. Seattle, WAMedian list price: $592,000
Median days on market: 37.8
Change in days on market: +19 days
Pike Place Market in Seattle
Sean Pavone/iStock
Long the poster child for rapidly rising home prices, high-flying Seattle finally hit the power lines late last year. Would-be buyers were priced out at the same time that sellers and investors, sensing the metro had peaked, began listing more properties. That resulted in homes staying on the market for 19 days longer in February compared with a year ago. And that big drop still wasn’t enough to get Seattle knocked off our ranking. Far from it, in fact.
“It’s still a tight market, but it is not as tight as we’ve seen over the last couple of years,” says Matthew Gardner, chief economist at Windermere Real Estate, a Seattle-based brokerage. “Well-positioned, well-priced homes are still selling very quickly.”
There are fewer bidding wars, Gardner says. But buyers who think that means they don’t have to act fast will lose out.
“We are still a seller’s market, but it’s just a little less frantic,” he says.
4. Denver, COMedian list price: $462,000
Median days on market: 40.2
Change in days on market: +4 days
Denver
Stefan Tomic/iStock
The Mile High City is in the midst of a record housing shortage that gives buyers hours—not days—to submit their offers.
“I see bidding wars every day. It’ll go back and forth between buyers trying to offer the highest and try to best each other. And half those offers are in cash,” says Ryan Penn, associate broker at 360dwellings Real Estate, in Denver. “I’ve had clients list their house on a Monday and have 10 to 15 offers by Tuesday night.”
The Denver market is driven by well-off, first-time home buyers looking for something between $300,000 to $500,000. There’s precious little below that range anymore, Penn says.
5. Boise City, IDMedian list price: $340,000
Median days on market: 40.9
Change in days on market: -1 day
Boise
peeterv/iStock
San Francisco’s loss may be Boise City’s gain. Folks from higher-cost Western cities continue to flock to the Idaho mountain town, driven by good prices, natural beauty, and its own burgeoning tech scene.
“It’s not uncommon for a home priced under $250,000 to get eight, nine offers,” says Robert Inman, director of operations for Boise’s Best Real Estate Team, a Keller Williams affiliate. “The prices have just gone up, up, up. ”
Home prices are up 8.8% here year over year as the population has increased 9.3% from 2013 to 2017.
Popular neighborhoods include Boise’s North End, where many of the three-bed, one-bath, wooden abodes were built in the early 1900s. Homes there are going for around $400,000, but can be worth more than $1 million once they’re fixed up.
The rest of the top 10 metros with the fewest days on market are Omaha, NE; Nashville, TN; Las Vegas; Columbus, OH; and Minneapolis.
OK, now let’s take a tour of the cities where you have plenty of time to shop around for a home—and maybe even negotiate down prices.
Markets where homes take longest to sell
Tony Frenzel
1. Brownsville, TXMedian list price: $200,000
Median days on market: 130.9
Change in days on market: -11 days
Brownsville, TX
DenisTangneyJr/iStock
This U.S.-Mexico border town enjoys its high-energy celebrations, from the annual Latin Jazz Festival to the Sombrero Fest. But when it comes to housing, things amble along at a relaxed pace.
The reason? Paychecks tend to be smaller in Brownsville, and folks don’t part with their money easily. In this market, sellers often have to make sacrifices in order to sell their homes faster.
“A lot of these folks don’t have the down payments,” says Bruno Zavaleta, a broker at Zavaleta Realty, in Brownsville. “So they’re asking for seller concessions to help with closing costs.”
But that doesn’t mean first-time buyers can be too relaxed. Homes priced from $80,000 to $130,000 sell considerably faster. Earlier this year, Zavaleta listed a three-bed, two-bath home with a pool for $129,000, and within a week he had three offers on it.
The opposite is true for expensive homes. “Half-a-million-dollar homes will sit there for months, if not years, before they sell,” Zavaleta says.
2. Claremont, NHMedian list price: $259,700
Median days on market: 119.0
Change in days on market: -18 days
Downtown Claremont
Visions of America/UIG via Getty Images
The city of Claremont has poured millions into revitalizing sections of its downtown. That helped improve the housing market here, but not quite enough: Claremont has long lagged behind the rest of the state, and still has a lot of catching up to do.
A big reason is that folks just don’t have the income to afford the high cost of New England living. The median household in New Hampshire brings in $71,305 per year, compared with just $58,777 in Claremont.
But there are deals to be had. There are a number of homes under $140,000 in this market, although they tend to sell at a faster rate as first-time buyers try to get into the market.
3. Houma, LAMedian list price: $187,500
Median days on market: 112.8
Change in days on market: +2 days
Four-bedroom home in Houma
realtor.com
Just an hour from New Orleans, Houma lies in the heart of Cajun country. Houma’s downtown district is on the National Register of Historic Places. But while many in this Gulf community still work gathering shrimp or shucking oysters, these days the oil industry dominates the job market.
Local offshore drilling took a hit in 2015, when the price of oil dropped, and it hasn’t fully rebounded—weakening the economy and pulling the steam out of its housing market since fewer people are looking to buy.
“When oil prices went down, more houses went on the market and they took much longer to sell,” says Michelle Parsons, an associate broker at Town and Country Real Estate, in Houma.
But buyers still need to move quickly in areas with good schools, like Mulberry School District. Brick one-story homes priced under $250,000 near this school go faster than most.
4. Salisbury, MDMedian list price: $317,000
Median days on market: 111.8
Change in days on market: No change
Home in Salisbury
realtor.com
Located east of the Chesapeake Bay, Salisbury is a quaint, coastal community known for its great seafood (try the Maryland blue crab!). But when it comes to reeling in a home, buyers can let that line sit out for a while.
This market doesn’t have a huge number of the first-time buyers who usually keep a market churning at a steady rate. Four in 10 home buyers here are over 60, and they tend to take their time.
But these older buyers have plenty of choices. In fact, realtor.com recently named Salisbury one of the top markets in the country to buy a “forever home.” The many one-level rambler-style homes are local favorites, and one can be grabbed for under $200,000.
5. Lynchburg, VAMedian list price: $140,000
Median days on market: 110.5
Change in days on market: 40 days
Lynchburg, Virginia
SeanPavonePhoto/iStock
Home buyers in Lynchburg almost have too many choices after the number of homes on the market jumped 53% over the previous year. And the length of time it takes to sell a home has skyrocketed, too.
But not every neighborhood is buyer-friendly. Those looking to move up into old-money neighborhoods like Boonsboro, a very desirable suburb, had better be ready to put down a bid fast, says Scott Fogleman, associate broker at Keller Williams Lynchburg. Competition is fierce on properties like this two-story brick home with four fireplaces, priced at $360,000.
The rest of the top 10 metros with the most days on market are Torrington, CT; Hilo, HI; Naples, FL; Hilton Head Island, SC; and Huntington, WV.
* A metropolitan statistical area is a designation that includes the urban core of a city and surrounding smaller towns and cities.
** Change in median days on market between February 2018 and February 2019.
Allison Underhill and Clare Trapasso contributed to this report.
The post Spring Housing Slowdown? No Way! Here’s Where Homes Are Flying Off the Market appeared first on Real Estate News & Insights | realtor.com®.
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