Where in the U.S. are properties selling fastest?

In Which States Did Properties Sell Most Quickly in October 2017?

Posted: 30 Nov 2017 06:23 AM PST

Amid strong demand and tight supply, REALTORS® reported that properties that sold in October 2017 were typically on the market for 34 days in October 2017, down from 41 days compared to October 2016, according to the October 2017 REALTORS® Confidence Index Survey.[1]
During the August–October 2017, properties sold in less than 31 days in 18 states and in the District of Columbia, with properties selling most quickly in these areas: Washington (22 days); Nevada (23 days); Colorado (25 days); Massachusetts, the District of Columbia, California, Minnesota, and Utah (25 days), Kansas, Nebraska, Tennessee, and Oregon (26 days); Texas, Georgia (28 days), Indiana, Kentucky, Iowa (29 days), and South Dakota, Wyoming (30 days).

According to Realtor.com data, properties sold most quickly in the metro areas of San-Francisco-Oakland-Hayward (31 days), San Jose-Sunnyvale-Sta. Clara (31 days), and Seattle-Tacoma-Bellevue (37 days). Properties sold quickly within 45 days in other metro areas in California, Washington, Utah, Tennessee, Colorado, Arizona, Idaho, Minnesota, Wisconsin, and Massachusetts.
Amid tight supply, the median days on market have been broadly on a downtrend since 2011 when the properties typically were on the market for three months from May 2011, when this question was first asked in the RCI Survey, through March 2012.

Millennials: Tech-Savvy, First-Time Home Buyers in the Suburbs

Re-posted from National Association of REALTORS

Millennials, buyers ages 36 years and younger, make up the largest share of home buyers by generation at 34 percent of all home buyers in 2016 (down from 35 percent in 2015). This group was born between 1980 and 1998 and is the largest share of buyers for the fourth consecutive year. Sixty-six percent of Millennials are married couples and this age group has the largest share of unmarried couples at 13 percent. Millennials have smaller families—they have the largest share with only one child under the age of 18 years living at home at 22 percent. Overall, 49 percent have one or more children.
Millennials are most likely to rent an apartment (56 percent) or live with friends or family (20 percent) as their previous living arrangement. The primary reason that this generation purchase homes is the desire to own a home of their own at 50 percent and they state that it is just the right time to buy (60 percent).
Millennials account for the largest share of first-time home buyers at 66 percent. This generation primarily buy previously owned homes (89 percent) for a better price (44 percent) and new homes (11 percent) to avoid renovations or problems with electricity and plumbing (48 percent). Millennials account for the smallest share to purchase multi-generational homes at seven percent. When they did purchase multi-generational homes, the primary reason is for cost savings at 34 percent.
Buyers aged 36 years and younger are the most likely to purchase in the suburbs or a subdivision at 57 percent. Equal to buyers 37 to 51 years, they purchase within a median of 10 miles from their previous residence. More than other generations, they purchase homes for the quality of the neighborhood (66 percent), convenience to a job (65 percent), overall affordability of homes (50 percent), quality of school districts (40 percent), convenience to entertainment and leisure activities (25 percent), and convenience to parks and recreational facilities (22 percent).

They have a median household income of $82,000. They purchase the least expensive homes at a median home price of $205,000. This generation of buyers purchase the smallest homes in size at a median square feet of 1,800, equivalent to buyers 62 years and older. They also purchase the oldest homes at a median year of 1984.

Commuting costs are the most important to Millennials, 39 percent said this was very important. Compared to other generations, Millennials are also the most likely to say that they compromised on the price of the home, size of the home, lot size, style of the home, and distance from their job. Millennials have the shortest expected tenure in the home at a median of 10 years, on par with buyers 71 years and over.

More than other generations, Millennials are the most likely to look online for information about home buying and talk with a friend or relative as the first step in their home search process. They are the most likely to find the home they purchased using the internet (56 percent), most likely to frequently use the internet in their search (93 percent), and most likely to use a mobile device to search for homes (86 percent). Finding the right property is the most difficult step for Millennials at 57 percent. Millennials are the most likely to move with life changes (29 percent), move with a job or career change (20 percent), outgrow the home (19 percent), and want a nicer home with added features (10 percent).

Millennials are the most likely to finance their home purchase at 98 percent. The median percent financed is 93 percent, the highest share among the generations. Millennials are the most likely to use savings (75 percent) and a gift or loan from a friend or relative (29 percent) as the source of their downpayment. Buyers 36 years and younger are the most likely to say saving for the downpayment is the most difficult step in the home buying process at 23 percent. Among those who had difficulty saving, 55 percent of Millennials have student loan debt and 32 percent have car loans, more than other age groups. Overall, 46 percent of Millennial home buyers had student loan debt. They are the most likely to use an FHA loan (27 percent) and least likely to use a conventional loan (56 percent) compared to other generations. Millennials are the most likely to feel that their home purchase was a good financial investment at 85 percent.

Real Estate Market Predictions for 2017: If we had a crystal ball…

Most don’t like to predict, but I found an article written by Forbes who polled their “experts”

Forbes 8 points of predictions for 2017:

1.      Home prices will rise, but slowly – slower than in 2016

2.      Inventory of homes for sale will remain low, but there will be a few more than 2016..

3.      Interest rates will be volatile. Expect a rise but not too much, we hope.

4.      Credit availability may improve – maybe. Trump will loosen up on banks, banks may not loosen up on their requirements.

5.      Affordability will worsen: Wages are expected to grow in America's big cities this year, but the share of homes affordable to someone earning the median income is not.

6.      More Millennials will enter the market. At one time it was thought they would never buy.

7.      A Sellers market will remain, buyers competition will increase.

8.      Political uncertainty replaced by policy uncertainty. The Trump effect is unknown and uncharted territory.

Taking Inventory of our Housing Supply

Inventory is still low. It has been for years now. Prices have risen, interest rates are low, a good time to sell, a good time to buy. 

Usually when inventory is low it’s a great time for sellers. With interest rates as low as they are it’s also a good time for buyers This could be called a balanced market, but the low inventory tips in favor of the seller just a little.

Fall is upon us and Winter is not far behind which signals the usual slow down for real estate. Inventory will decrease and there will be even less to choose from for buyers. This could cause greater demand such that by the time February rolls around the market will be sizzling with anxious buyers awaiting the arrival of new listings. 

But then there is the election… and who knows. Borrowing rates could become volatile which in turn could cause a less desirable lending environment. Even though prices have the potential to stay strong, assuming the prices will continue to climb could be a risky bet. 

The question left unanswered here is “why has the inventory been so low for so long?” There can be all kinds of reasons, but I read an interesting statistic lately from the National Associations of REALTORS Profile of Home Buyers and Sellers.  It shows that since 2011, the bottom of the housing downturn,  home owners have been staying in their homes longer. Where as from 2000 – 2008 the average period of keeping a home was 6 years, now it has climb to 9 years!

“In 1985, the median tenure for sellers remaining in their home was five years, the lowest since tracking the data in the 30-year period. From 1987 to 2008, the median tenure for sellers was a steady six years throughout the course of about a 20-year period. The only exception was in 1997 when the median tenure jumped up one year to seven years for sellers. As the U.S. housing market entered a recession, the median tenure for sellers began to rise—seven years in 2009, eight in 2010, and to nine years in 2011 where it has remained steady through 2015. The only exception is in 2014 when the median tenure for sellers reached an all-time high at 10 years, but came back down to nine last year. Thus market changes in the last decade have caused sellers to remain in their homes longer, increasing the median number of years in the home by 50 percent more than they did 20-30 years prior.”

This is the first piece of information I have come across that explains why the inventory of existing homes for sale has remained low for the past few years. If this is a leading factor, and unless builders are able to start producing more new homes for buyers to purchase, I believe we should expect inventory to remain low for a while.