Real estate is local. We hear that constantly, despite being force-fed national housing statistics all the time. But both serve a unique purpose to give us clues about the direction of the overall economy, or just our local housing market.
A new analysis from Trulia broke down time on market by low-price tier, mid-price tier, and high-price tier.
Nationally, they found that homes in the low-price cohort are moving faster than both the mid-price and high-price tiers, which is pretty standard. It’s typically harder to sell an expensive home (fewer eligible buyers).
Overall, 55% of homes listed for sale in mid-February were still on the market, generally a bad sign for the home seller who likely faces a price reduction. Still, that’s down from 56% a year ago.
In the low-price tier, only 49% of homes listed for sale two months ago were still on the market, down from 52% a year earlier.
That compares to 62% in the high-price tier, down just one percent from 63% a year ago.
Put another way, the sale of lower priced homes is accelerating while higher-priced home sales are slowing.
Where Homes Are Selling the Fastest
2. San Jose
3. San Francisco
5. San Diego
7. Los Angeles
8. Orange County
10. Middlesex County
These are your hot markets at the moment. For the record, none of them are cheap, which kind of bucks the national trend of cheaper homes selling faster, though there are probably fewer listings.
Oakland has been the hottest metro, with just 29% of homes still for sale after being listed for at least two months. That number is down from 31% a year ago.
The biggest year-over-year winner has been Denver, where only 38% of homes were still on the market after at least two months, compared to 47% a year ago.
Interestingly, Denver is hitting new all-time highs in the home price department, which makes you wonder if it’s getting bubbly at high altitude.
Despite Orange County, California making the top 10 list, home sales are actually slowing there, with 45% still on the market after at least two months, compared to 38% a year ago. The same trend is visible in Los Angeles.
Home prices aren’t cheap, which might explain some of the slowdown. They may have also overcorrected.
Where Homes Are Selling the Slowest
1. Richmond, VA
2. Hartford, CT
3. Albany, NY
4. New Haven, CT
5. Long Island, NY
6. Knoxville, TN
7. Springfield MA
8. Columbia, SC
9. Birmingham, AL
10. Greenville, SC
The slowest housing market in mid-April was Richmond, Virginia, where a whopping 72% of homes listed at least two months earlier still hadn’t sold.
That’s up 11% from the 61% share a year earlier. It was followed by Hartford with a 71% share, and Albany, New Haven, and Long Island all at 70%. Perhaps the weather could be to blame…
Interestingly, faster moving markets have had bigger price increases, which seems somewhat counterintuitive.
But the rationale is that these hot markets are able to increase asking prices steadily because demand is so strong. And that demand means fewer homes stay on the market, further allowing for price increases.
Of course, there are limits, and those have been tested in fringy spots like Phoenix and the Inland Empire of California.