What Does It Mean When They Say a Market Is HOT?
Remember the days when your listing sat on the market for 120, 150, 180+ days before selling? Most likely, you are trying to forget it. As Money.com pointed out in their recent article 12 Cities Where Homes are Flying off the Market, homes that sold in April spent a lot less time on the market. How much time? An average of 86 days (source: The National Association of Realtors). That is great news for sellers…
…if your home is one of those that sold.
Houses are Flying Off the Market?
But what if your’s didn’t? Are you part of the pattern or part the noise? Reading the article closely, you’ll note that the 86 days reflects days on market for sold homes. We decided to take a look at the ones that didn’t sell. Turns out that there are some interesting insights to be gleaned by looking into these markets* from another perspective.
What we looked at: Properties that meet these criteria:
- Listed in 2014
- Still on the market
- Residential single family
To see how the inventory available to have been sold in April was faring, we also looked at the subset of properties listed prior to April 1st that are still on the market. We then calculated the average and median days on market and did some comparisons.
Here’s what we found.
San Francisco is #1
Based on nearly every criteria, San Francisco topped our list, up from Money.com’s #4 spot. Looking at all listings posted in 2014, the median DoM was an incredibly low 26! And the average of 37 wasn’t far behind.
Once again, San Francisco is up near the top just a single percentage point behind Oakland. As Money.com’s article points out, there are some interesting interplays here between rapid turnover and price pressure with Oakland’s pricing holding very stable and San Francisco’s continuing to climb as both cities enjoy quick inventory turnovers. Meanwhile, Austin, Dallas, Boston and Seattle / Tacoma all come in with more than twice to top finisher’s value.
We expected these strong trends to be reflected in the subset of listings from the first quarter. Specifically, we anticipated that we would see the same pattern favoring the Bay Area cities for days on market. What we found was…well…a little surprising. The markets are much more tightly packed.
San Francisco, the hottest market overall, has one of the longer DoM values, supporting the idea that if you are one of the minority of sellers that wasn’t able to sell your property in this market, there may be something else at play specific to your listing. Rather than general market conditions, you might want to compare your pricing, condition, and terms against the overwhelming majority of listings that are moving quickly. Boston, on the other hand, with a longer time to sell overall, has one of the shortest median DoM values for Q1 listings. This might indicate that it’s generally a slower market rather than isolated issues with specific properties. As the only representative of the Northeast in this list, we know it was a long, cold, snowy winter here and the market may have taken a while to warm up.
Of course, that’s just a quick surface reading. We’d love to hear your interpretation!
* no information for the following markets was directly available to us at the time of writing: Anchorage, AK; Sacramento, CA; Stockton, CA.
Please contact us if you have questions about the underlying data referenced in this article, or would like to have access to that data in the form of custom reports, API or bulk files.