Wild animals instinctively know it: Winter is a lean time. And that same harsh reality is confronting home buyers in the first month of 2017, although instead of scrabbling at the frozen earth looking for a few acorns, they’re hunting down an increasingly scarce supply of homes for sale.
And the other buyers aren’t hibernating, either.
That’s what our preliminary analysis of the data on realtor.com® for January tells us. With the market hitting new lows in housing supply, the demand for real estate is strong even in what’s traditionally the slowest time of the year. Homes are selling 4% faster this month than they did at this time last year, even as prices remain at record highs.
“We saw evidence of a stronger-than-normal off-season starting last September and October due to pent-up demand and surging interest from first-time buyers,” says Chief Economist Jonathan Smoke of realtor.com. “The downside to this strong off-season is that we have started 2017 with a new low volume of available homes for sale and a new high for prices.”
Typically, the median list price reaches its lowest point in January. At its current estimate of $250,000 for the month, it’s holding steady from last month and 10% higher than one year ago. And that would be a record for January.
All told, we’re expecting to see a 9% decrease in listing inventory in January from December, and an 11% drop since one year ago. While nearly 360,000 new listings will enter the market in January, that still won’t be enough to meet buyers’ needs.
And buyers are getting more anxious than ever, with mortgage rates rising since the election and the Fed’s move to raise a key interest rate last year.
“The threat of rates approaching multiyear highs in the months ahead is creating a sense of urgency,” Smoke says.
So which markets are burning hottest even in the deep freeze of winter? We analyzed the country’s largest metropolitan markets to find those where buyers are checking out the most listings and homes are zipping off the market like toboggans on an icy chute.
As usual, California dominated the list, with 12 markets (including eight of the top 10), but seven other states made it on there, too. The only new entrant to the list this month was Tampa, FL, which is up five spots in the ranking since December. By the way, these markets typically include smaller satellite cities, so when we say “San Francisco” we also mean “and Hayward and Oakland.”
By Cicely Wedgeworth | Jan 26, 2017