Several factors, including growing demand, inventory, and home prices, are reeling in the spring homebuying season a little early this year.
Realtor.com reported in its First Look analysis of February data that housing inventory is moving three weeks faster than last month in nine housing markets. In addition, housing inventory is moving six days faster compared to last year and four days faster than January. Meanwhile, median listing prices have ticked up to $230,000, up 8 percent year-over-year and 1 percent from last month.
“It looks like the groundhog was correct–spring is coming early this year, and not just when it comes to the weather. Early readings on February inventory and activity indicate that the spring home buying season has begun," said Jonathan Smoke, Chief Economist of Realtor.com. "We don’t usually see this type of acceleration until March or April. On a local level, the acceleration is really dramatic with nine of the top ten hottest markets shaving three weeks or more from their median age in January.”
Realtor.com found that the median age of inventory is now estimated at 96 days, down 6 percent year-over-year and 4 percent from January. Listing inventory is down 4 percent for the year, but has begun its seasonal increase of 1 percent for February.
Realtor.com also ranked the top 20 hottest markets, or markets that receive two to five times the number of views per listing compared to the national average, inventory moves 44 to 78 days more quickly than the rest of the U.S., and they have also seen days on market drop by a combined average of 32 percent month-over-month or an average of 22 days.
“I would use the phrase ‘pent-up-demand’ liberally—we’re seeing it come through in the marketplace,” Smoke stated. “The people who didn’t buy last year were frustrated because they were outbid or couldn’t find a home that met their needs. So they more or less took the holidays off, and are back with way more intensity.”
The hottest market is located in the San Francisco-Oakland-Hayward, California metro, with a median age of inventory of 25 days in February, down significantly from January's age of 51 days. San Jose-Sunnyvale-Santa Clara, California and Dallas-Fort Worth-Arlington, Texas occupied the second and third spots on the list with a median age of inventory of 19 and 42, respectively.