Published July 25, 2012
| 24/7 Wall St.
Homes are selling faster in the majority of U.S. markets than they were a year ago, according to data released Tuesday. The report, which looked at the largest housing markets in the country, shows that compared to June 2011, the average number of days homes spend on the market has fallen by nearly 10%. In some areas, such as Oakland, Calif., the average days on market has decreased by nearly 50%.
According to the data, published by real estate trends site Realtor.com, the average U.S. home spent 84 days on the market last month. In 10 housing markets, homes spent 48 days or less on the market before being sold. In Oakland, homes spent just 24 days on market. Based on Realtor.com‘s report, 24/7 Wall St. identified the 10 cities where homes sell the fastest.
The metropolitan areas on this list tend to be in states that have been harder hit by the economic downturn. Five of the metropolitan areas are in California, which was sixth in 24/7 Wall St.’s recent list of states with the highest percentage of underwater mortgages. Another metro area is in Michigan, which ranked fifth in the underwater mortgage list, while yet another metro area is in Arizona, which had the second-highest rate of underwater mortgages.
The days houses spend on the market has declined precipitously in the past year. In all the markets on the list but one, the home’s time on the market has declined. The declines ranged from 14% to about 48%. Four of our 10 metro areas had among the largest declines in the average days houses spent on the market compared to last year.
Inventory as a whole has also dropped in all of the metro areas on our list, compared to the year-earlier period. The amount of available houses for sale fell from just over 4% in one metro area to nearly 58% in another. Seven of the areas had among the top 10 inventory decreases.
Metro areas with speedy home sales also had increases in median home prices compared to a year earlier. Four of the metro areas on this list are in the top 10 in terms of fastest growing median price listing, while seven of the metros on our list are in the top 20. No metro area on this list had a declining median price compared to last year.
However, there appears to be little relationship between how fast homes sell and the median home price itself. For example, San Francisco and San Jose made our list. Of all 146 metropolitan areas surveyed, these two had the highest and third-highest median home prices, respectively. Yet Detroit also made our list, despite having the lowest home price of all 146 metro areas.
Realtor.com provided information on the median age of inventory, total listings and median home values for June, along with the year-over-year change in each of these categories. Realtor.com also provided a rank of the metro areas most searched for on its website in June. Meanwhile, 24/7 Wall St. looked at several pieces of data from RealtyTrac to gain a broader context of the economic state of the metropolitan areas. In addition to looking at the metro area foreclosure rate in June, we looked at the unemployment rate for June and median family income as of the end of 2011.
These are the 10 cities where homes sell the fastest.
10. Phoenix-Mesa, Ariz.
> Average no. of days on market: 48
> Median home price: $185,000 (73rd highest)
> Population: 4,192,887 (20th highest)
> Unemployment: 7.72% (65th highest)
The entire metropolitan area of Phoenix-Mesa, which has a population of more than 4 million, had 13,912 homes listed on the market in June — the 20th highest of all the metropolitan areas surveyed. This is a drop of almost 40% since last year at the same time. Speedy home selling may be boosting the housing market in the Phoenix area. The median home price has shot up about 32% since last year, more than double the increase of the next highest market, San Francisco. Nevertheless, the Phoenix-Mesa housing market still has its problems. About 2% of the homes in the area are in foreclosure, the highest rate on this list and the fourth highest of all the metro areas surveyed.
9. Detroit, Mich.
> Average no. of days on market: 47
> Median home price: $99,000 (the lowest)
> Population: 4,296,250 (18th highest)
> Unemployment: 11.21% (9th highest)
Unlike many of the metropolitan areas on the list with high home values, in Detroit there are many bargains to go around for homebuyers. Of the 146 regions surveyed by Realtor.com, only Detroit had a median home value below $100,000 last month. Housing prices in the area did not manage to crack through the six-figure ceiling despite increasing 10% from last year, a much higher rate than the national average of 2.68% increase. This has sparked much interest among buyers. Detroit was the second-most searched metropolitan area on Realtor.com, with only the far more populous Chicago area getting more search inquiries. Meanwhile, the area’s foreclosure rate is improving. While 1.33% of houses are in the foreclosure process, that is down nearly 27% from the year earlier period.
8. San Jose, Calif.
> Average no. of days on market: 45
> Median home price: $549,000 (3rd highest)
> Population: 1,836,911 (39th highest)
> Unemployment: 8.89% (34th highest)
California was hit hard during the housing downturn, and San Jose has been no exception. From the first quarter of 2007 to the fourth quarter of 2011, home prices plunged 32.9%. Nevertheless, the median price of one of the 3,621 houses listed is still an impressive $549,000, the second highest of all home prices on the list and the third highest of all metropolitan areas surveyed. Buyers should not dawdle either. It takes only 45 days on average to sell a home in San Jose. Possibly contributing to high home prices is high income. While San Jose has a higher-than-average unemployment rate of 8.89%, the median family income is $99,500, the highest of any area on this list.
7. San Francisco, Calif.
> Average no. of days on market: 45
> Median home price: $725,000 (the highest)
> Population: 4,335,391 (17th highest)
> Unemployment: 7.52% (68th lowest)
While Detroit’s median home listing price is less than $100,000, the median home price of $725,000 in the San Francisco area is the highest measured in the Realtor.com report. Yet, despite the high prices of homes, there is o’t too much idle time on the market as the average home is sold in 45 days. San Francisco’s housing market is backed by a relatively strong labor market. The 7.5% unemployment rate is below the 8.2% unemployment rate in the United States and the 10.8% rate in California. The area’s median family income of $98,500 as of the end of 2011 is also significantly higher than the national average of $63,000.
6. Seattle-Bellevue-Everett, Wash.
> Average no. of days on market: 45
> Median home price: $350,000 (17th highest)
> Population: 3,439,809 (21st highest)
> Unemployment: 7.40% (56th lowest)
The Seattle metropolitan area has a population of more than 3.4 million people, yet only 6,486 homes available for sale. With such conditions, it is not surprising that homes will get snatched up pretty quickly. Houses on average sit just 45 days on the market, which is down nearly 34% since last year. Seattle has shown signs of a recovering housing market. The median home price of $350,000 is up almost 13% since last year, one of the 10 highest increases. Only 0.51% of homes in the area are in foreclosure, the second lowest on this list after Anchorage. The unemployment rate of 7.4%, well lower than the U.S. rate of 8.2%, helps give the housing market a boost.
5. Bakersfield, Calif.
> Average no. of days on market: 44
> Median home price: $149,500 (23rd lowest)
> Population: 839,631 (60th lowest)
> Unemployment: 14.14% (4th highest)
Bakersfield joins many other California cities in selling homes fast, but houses in the area are not likely to have San Francisco-like prices. The median home price of $149,500 is the lowest on this list, except for Detroit, and only a little more than a fifth of the median price of a San Francisco house. Only 1,815 houses were listed on the market, a decline of more than 47% from a year earlier. Meanwhile, the 44 days on the market is a drop of 22.8% from a year ago, compared to the national average of 9.67%. The labor market is far weaker in Bakersfield than it is in some of California’s healthier local economies, with an unemployment rate of more than 14% in June, compared to about 7.5% in San Francisco and 8.2% in the United States.
4. Fresno, Calif.
> Average no. of days on market: 43
> Median home price: $174,900 (58th lowest)
> Population: 930,450 (62nd highest)
> Unemployment: 15.54% (2nd highest)
Fresno has many similarities to Bakersfield. The median home price of $174,900 recorded in June is far lower than other California cities such as San Francisco and San Jose, but it is up 10% from a year earlier. Similar to Bakersfield, the 2,237 houses on the market are nearly half (49.1%) the number that were available last year. The 43 days on the market is a drop of 14% compared to a year ago. The economy in Fresno continues to be weak. About 1.8% of the houses in the area are in foreclosure, second only to Phoenix on this list. The unemployment rate of 15.54% is the highest on our list and the second highest of all metropolitan areas surveyed. Meanwhile, the median income is $52,900 as of the end of 2011, or $46,600 less than San Jose.
3. Anchorage, Alaska
> Average no. of days on market: 43
> Median home price: $289,500 (23rd highest)
> Population: 380,821 (20th lowest)
> Unemployment: 6.13% (22nd lowest)
Prospective home buyers in Anchorage really do not have the option of being choosy. There are only 1,120 houses on the market, a decline of about 29% from the previous year. This is the fourth-smallest number of home listings in all metropolitan areas surveyed. Meanwhile, the median home price listing, at $289,500, is up a mere 0.17% from the year earlier, far slower than the growth in places such as Phoenix. Still, the good news is that Anchorage’s median home price is well above the U.S. average of $195,000, signaling a stable housing market. Anchorage is faring better than many of its counterparts economically. The unemployment rate of 6.13% is the lowest of any metropolitan area on the list.
2. Denver, Colo.
> Average no. of days on market: 33
> Median home price: $269,000 (27th highest)
> Population: 2,543,482 (27th highest)
> Unemployment: 7.51% (67th lowest)
The 33 days to sell a house in the Denver area is actually up by 10%, one of the very few metro areas to see an increase in the time it takes to sell a home. Denver was not as hard hit by the housing bust as many other metropolitan areas. Home prices from their peak in the first quarter of 2006 to the fourth quarter of 2011 dropped just 11.1%, well below the national average of 34.2%. A median family income of $75,000 and an unemployment rate of 7.5%, both well below national averages, are positive signals for a housing market likely to remain on stable footing. The only bad news is that housing prices are not expected to jump anytime soon. Home prices are projected to rise 0.6% in the Denver area from the fourth quarter of 2012 to the fourth quarter of 2013, compared to 4.2% in the U.S. in general.
1. Oakland, Calif.
> Average no. of days on market: 24
> Median home price: $379,000 (12th highest)
> Population: 4,335,391 (16th highest)
> Unemployment: 9.56% (20th highest)
If you want a house in Oakland, you had better grab it while it’s hot. The average house in Oakland is sold 24 days after its been on the market, the fastest of all metro areas by a sizable nine days. From the time housing prices peaked in the first quarter of 2006 to the fourth quarter of 2011, home prices plummeted 45.9%, significantly higher than the U.S. average of 34.2%. Still, that is better than its California counterparts of Bakersfield and Fresno, where housing prices plunged 58.3% and 54.7%, respectively. Only 3,547 houses were on the market for an area population of 4,335,391 (which includes the San Francisco area). The number of available homes declined 57.92% compared to the year earlier period.