Good news. The latest reports show that home prices and sales are up. Yet perhaps even more telling about the state of the mortgage market is how quickly homes are selling. And they are selling fast. Selling like hotcakes.
New data from housing site Redfin shows that in 19 of the country’s major markets more than one-third of all homes were sold within two weeks of being listed in February. That’s up from 30.3 percent in January. And in some states things are moving even faster. California leads the nation with the top six slots for fastest-selling markets. San Jose saw 63.1 percent of its homes sold in two weeks or less, San Francisco was second with 56.8 percent, Ventura was third with 52.6 percent, Los Angeles with 51.3 percent was next, the Inland Empire in southern California was fifth with 49.8 percent and San Diego was sixth with 49.1 percent of its homes on the market selling in under two weeks.
Boston was the U.S. city with the slowest selling rate, with only 3.7 percent of homes listed selling within 14 days.
The increased speed of home sales has been fueled by a rapidly shrinking inventory. Investors are buying up foreclosures on a large scale and many potential sellers are now holding on to their homes hoping for prices to rise a little higher before the sell. Compared with last February, the total number of homes on the market was down 32 percent this year. And, not surprisingly, the cities with the steepest yearly drops in inventory were all California cities. Sacramento was at the top with a 68.3 percent decrease in homes for sale. It was followed by San Francisco, Los Angeles, Ventura, Inland Empire, San Jose and San Diego.
All of this commotion in the housing market is helping to push home prices up. They increased 13 percent from February 2012 and are expected to rise at least 8 percent this year. As prices rise, more and more underwater homeowners will gain back enough equity to be able to sell. That will hopefully increase inventory. Homebuilders are also ramping up their production to keep pace with demand. And ultra low mortgage rates will continue to make homebuying an attractive venture throughout the year.