March 20, 2013 – Homes sold faster last month than in any February since 2007 as eager buyers met a tight supply of homes for sale, industry figures show.
Homes were on the market for a median of 98 days last month, down from 123 days in February 2011, Realtor.com says. That means half the homes listed for sale in February were on the market for less than 98 days and half for more than that.
Even 98 days is long for many markets. In Oakland, homes spent just 14 days on the market last month before they went under contract or were pulled off for other reasons, Realtor.com data show. In Sacramento – just 21 days.
“Things are flying off the market,” says Barbara Hendrickson, of Red Oak Realty in Berkeley, Calif.,
While eight of the 10 fastest-moving markets were in California, Denver and Seattle made the top 10, too, with median market times of 28 and 33 days, respectively, Realtor.com says. Nearly all of the markets with low median market times are also seeing big declines in home listings.
The average dropoff was 48 percent from a year earlier in the markets with the greatest declines in supply. Most were in California. That compared with a 16 percent drop for 146 metropolitan regions for which Realtor.com has listing data.
But some metropolitan areas outside of California are also seeing fast sales, the Realtor.com data show.
In 18 non-California cities, the median number of days on the market was less than 60. Those included Phoenix, Washington, D.C., Detroit, Minneapolis, Atlanta, Dallas, Orlando and Fort Lauderdale.
Phoenix has led the home-price recovery, with prices up 23% in December vs. a year earlier, according to the Standard & Poor’s Case-Shiller index. The market there has been helped by strong investor demand for homes. Atlanta is now seeing a surge of investors, too, as is Orlando, Realtors say.
With such fast-moving markets, buyers and sellers are less likely to see price reductions on properties and more likely to see more multiple offers, says Curt Beardsley, vice president with Move, which operates Realtor.com. In Oakland, two out of three single-family homes sold in February drew multiple offers, says Aman Daro, marketing director for Red Oak Realty.
Buyers are also more likely to waive home-inspection contingencies to better compete, says Gerhard Ade, Seattle-area real estate broker with RSVP Real Estate.
He recently had a listing at $225,000. It got 12 offers and sold for $235,000 to a buyer who waived the home inspection and paid cash.
Cash buyers accounted for 28 percent of existing-home buyers in January, the National Association of Realtors says. Cash buyers are often investors. Their presence in a market can be tough for first-time buyers, who usually need a loan. Sellers typically prefer cash offers.
Nationwide, the inventory of homes for sale fell in January to a 4.2-month supply, almost an eight-year low, the National Association of Realtors says.