Competition in the housing market is heating up heading into May and June. Home prices are surging in major U.S. metros, with coastal California cities and Seattle leading the charge in monthly home value growth, according to Zillow’s newest market report.
San Jose, San Francisco, Seattle, San Diego and Los Angeles reign as the priciest markets among the nation’s top 50 metros. Bidding wars are commonplace in these areas, exacerbated by a scarcity of options. These metros also continue to grapple with below-average inventory recovery, maintaining pressure on buyers.
Conversely, Southern metros are experiencing subdued appreciation. New Orleans, San Antonio, Tampa, Orlando and Jacksonville are among the locales that posted the slowest month-over-month price growth in March.
New listings of existing homes have risen from pre-pandemic levels in cities like New Orleans and Austin, while San Antonio and the aforementioned Florida metros have seen some of the smallest drop-offs. Recovering inventory in these areas has helped to ease competition and bring price appreciation under control.
New Orleans, Austin and San Antonio are the three markets where buyers have more choices than before the pandemic, while Tampa, Orlando and Jacksonville are down only 9%, tied for the second-smallest drop.
“Shoppers in the market today should expect competition, especially for attractive listings on the lower end of the price range — a rare opportunity these days,” Skylar Olsen, Zillow’s chief economist, said in a statement. ”That’s kept prices ticking upward in most areas, despite affordability challenges.
“There are places where new construction relieved some pressure, and where homeowners are less locked into their mortgage, but not in the nation’s most expensive metros. In costly areas, homeowners hold extensive mortgage debt at previously low rates, and the pressure is dialed up even further.”
Competition is stiff for attractive listings. Homes sold in March changed hands in just 13 days, slightly slower than in recent years but significantly faster than pre-pandemic standards. Whether in the Midwest or in affluent coastal metros like Seattle and Washington, D.C., properties are spending minimal time on the market. Sold homes were listed for a week or less in 17 major metros.
In March, more than one in five sellers cut their list price, especially in markets like Tampa, Phoenix, Jacksonville, San Antonio and Orlando. On the other hand, nearly 27% of homes sold for more than list price in February, compared to less than 19% in 2019.
As the market enters April and May, buyers can anticipate an even fiercer competition for well-marketed properties, while others may linger longer on the market. The median age of listings on Zillow currently stands at 43 days, reflecting the varying dynamics across different segments of the housing market.
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