West is Cooking
He mentions the inventory shortage as a cause, but buyers’ internet efficiency is playing a role too – they are able to carefully track the good buys, and act promptly. From Nick at the wsj.com:
A shortage of inventory is having a dramatic effect on home sales in several Western U.S. housing markets.
Data from Redfin, the Seattle-based real-estate brokerage with operations in 19 markets, show that nearly 28% of homes listed in their markets in August had gone under contract in their first two weeks on the market. The share has held steady since March, when it shot up from around 17% of all homes last year.
But a look at specific market data show heavy variation. In short, the West is on fire. The Northeast? Not so much.
In San Jose, Calif., for example, more than 52% of all new listings in August went under contract in 14 days or less. Other cities with a higher share of briskly selling listings include San Francisco (46%); Ventura, Calif. (44%); San Diego (41%); Los Angeles (40%); Seattle (34%); Denver (33%) and Phoenix (32%).
One notable exception to this list of Western standouts: just 8.4% of new listings in Sacramento went to contract within two weeks in August.
Markets in other parts of the country, particularly the Northeast, saw less aggressive activity. Fewer than 10% of listings in Chicago, 6% in New York’s Long Island, and 4% in Boston had a contract within two weeks. Homes are moving quickly in Washington, D.C., which nearly one-third of homes under contract within two weeks of their debut.
The figures track closely with those markets that have seen large declines in homes for sale. As we noted on Tuesday, many California metros have witnessed sharp inventory drops over the past year.
Sales are also going more quickly in markets that have witnessed some of the greatest price declines. Many markets in the Northeast have had less severe price drops.