Photo: Davide D’Amico/Flickr
Winter months, especially January, are generally accepted to be “slow” months for US real estate. However, even with housing inventory being low across the country, some markets defied the winter sales doldrums and remained hot in January, with markets in California proving to be exceptionally hot, according to a new report by the listing site Realtor.com.
Traditionally, the median list price is at its lowest level in January, says Realtor.com. The median national list price is now estimated to be $250,000 for January, which is on par with December’s figure but also 10 percent higher than January 2016.
Demand for housing is “strong” despite new lows in national housing supply. Homes are selling 4 percent faster year-over-year even at record high prices, according to Realtor.com’s data.
The national housing supply is expected to decrease 9 percent in January from December. This decrease is listing inventory is 11 percent lower than January 2016. And even though there were 360,000 new listings to hit the market in January, they weren’t enough to meet the demand of homebuyers.
Realtor.com analyzed which of the country’s largest markets were getting the most searches by homebuyers on its website in January. California was by the far the state with the most hottest markets — 8 out of the top 10, and 12 out of the top 20 hottest housing markets were in California.
Unsurprisingly, San Francisco, CA ranked as the number one hottest market in January, its ranking unchanged since December. Homes in San Francisco sell for a median price of just below $800,000 and the area is known for its tight inventory. Home prices have remained high as the tech boom has continued throughout the area.
San Jose, CA, a mecca for tech startups, rose to the number two spot on the list after placing fourth last month. The median home price was $861,200 in January. Meanwhile Vallejo, CA ranked remained in the number three spot from December. Homes sold for a median price of $424,700 in January in Vallejo.
Similar to San Francisco, both San Jose and Vallejo tend to have fairly high prices, high demand, and low inventory. These markets are normally influenced heavily by the tech industry in Silicon Valley, which helps keeps prices and demand consistently high.
Other top hot markets in January included Dallas, TX, San Diego, CA, Sacramento, CA, Yuba City, CA, Denver, CA, Stockton, CA, and Fresno, CA.
Meanwhile, Tampa, FL — which ranked 18th on the list — was the only “new” market to makes its way into the top 20 in January, says Realtor.com.
“We saw evidence of a stronger-than-normal off-season starting last September and October due to pent-up demand and surging interest from first-time buyers,” says Realtor.com Chief Economist Jonathan Smoke.
However, Smoke added that the downside of a strong off-season was a new high for prices and a subsequent new low in terms of housing volume as 2017 began.
“The threat of rates approaching multiyear highs in the months ahead is creating a sense of urgency. And buyers are getting more anxious than ever, with mortgage rates rising since the election and the Fed’s move to raise a key interest rate last year,” Smoke says.
Click here to read the entire report.