Dive Brief:
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California cities continue to lead Realtor.com’s monthly list of the hottest housing markets, with San Francisco taking the No. 1 spot and Vallejo, CA, San Jose and San Diego in the top five. Dallas held its No. 2 slot from November. Midland, TX, and Yuba City, CA, joined the list this month.
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Demand for housing is up following the election, which along with a recent move by the Federal Reserve Board to raise interest rates, has pushed mortgage rates up from historical lows. Homes are selling five days faster in December than a year ago, and 2016 is set to close with a record-low number of homes for sale.
- Whereas the median home price typically lowers heading into winter, it held steady from November to December at $250,000, up 9% from December 2015.
Dive Insight:
Realtor.com’s monthly ranking of cities in which homes sell the fastest reveals where inventory conditions tend to be tight already. While limited housing stock is typically tied to elevated prices in the region, many markets are beginning to add back inventory, which could help prices soften and make it easier for younger, first-time buyers to enter the market.
Although demand is still outpacing supply in most parts of the country, some of the markets in which prices have risen the most dramatically, including northern California, are adding back inventory, according to Realtor.com’s 2017 Housing Forecast. Even with a tapering in price appreciation, however, the West region should see the highest prices and sales in 2017, with increases of 5.8% and 4.7% respectively.
A report this week from online apartment finder Zumper found a similar trend with rental housing, noting that some of the most expensive rental markets are cooling off. Zumper credits the trend to developers offering concessions to fill apartment projects that were conceived and constructed during the post-recession multifamily boom, meaning supply in that sector is slightly greater than demand.
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