- Competition in hot markets may be slowing down, according to a recent Trulia research report.
- Nationally, 63 percent of homes listed for sale on June 17 were still on the market on Aug. 17, which is up a bit from 61 percent for the same period last year.
- California continues to reign as the state with the fastest-moving markets.
Buyers in hot real estate markets like San Francisco, Seattle, Denver and Salt Lake City usually have to move fast to make an offer, but competition in these markets may be slowing down, according to a recent Trulia research report.
Measuring the share of homes for sale on Trulia from June to August, Trulia found that faster-moving markets had a lower percentage of homes still on the market after two months, while typically slower-moving markets had a higher percentage. Nationally, 63 percent of homes listed for sale on June 17 were still on the market on Aug. 17, which is up a bit from 61 percent for the same period last year.
California continues to reign as the state with the fastest-moving markets, with San Francisco, Oakland, San Jose, San Diego and Orange County making Trulia’s top 10 list of America’s fastest-moving housing markets. In fact, less than 34 percent of homes for sale in the top three San Francisco Bay Area metros remained on the market after two months.
But the news isn’t all bad for California homebuyers, Trulia said. The percentage of homes still on the market after two months has increased slightly over the past year. Meanwhile, Seattle, Salt Lake City and North Port-Bradenton-Sarasota, Florida, are gaining ground, having decreased between 4 to 7 percentage points from a year ago.
Affordability in these markets may be playing a role in this trend, Trulia noted. However, affordability may be starting to play a role in the priciest markets. Of the 50 most expensive housing markets, those with fewer homes for sale that are affordable to the middle class in 2014 tended to experience a slowdown.
“In other words, homebuyers, no matter how competitive the market is, have a limit,” Trulia reported.
“When the stock of cheaper homes dries up, not every buyer is able to up their budget and put offers on homes in a higher price tier. So some may delay buying a home, which leads to existing homes sitting on the market a tad longer. Still, homes in these expensive markets are moving faster than other less expensive metros.”
Those less expensive, slower-moving markets are led by Detroit, where entry-level homes on average move 4 percentage points slower than the rest of the market, Trulia said. Kansas City, Missouri, and New Orleans both have about 3 percent more entry-level homes on the market after two months.
And that number is 2 percent greater in Pittsburgh. Trulia noted that there was just a 1 percentage point advantage in the other six metros that round out its top 10 list of markets where entry-level homes are easier to buy.
What does this mean for homebuyers in the near term? According to Ralph McLaughlin, a housing economist at Trulia, it means that first-time homebuyers can be cautiously optimistic that normality may be creeping in on what has been an otherwise difficult marketplace over the past two years.
“Compared to last year, a larger share of homes are staying on the market after two months. Even the fastest-moving markets have slowed down somewhat. Moreover, in a handful of markets, first-time homebuyers looking for entry-level homes can actually take their time to find their dream home,” McLaughlin said.