If you’re looking to buy a house in the West, you’d better hurry, and you’d better bring your fattest checkbook, according to Redfin. Because properties in Denver, Seattle, San Francisco, and Portland are moving fast and commanding high prices.
In its latest report, Redfin measured housing markets' hotness based on the percentage of homes most likely to go under contract within 14 days according to the company's proprietary “Hot Homes” algorithm. In Denver, Seattle and Portland, more than 60 percent of homes listed so far this year were Hot Homes, outpacing all other markets Redfin tracks.
According to Redfin’s data, the national average number of days a home is on the market in the U.S. is 47. In Portland and Seattle, homes are up for a mere eight days, while homes in Denver and San Francisco are up for 10 and 19 days, respectively. In April 2012, a typical home in Denver found a buyer in 36 days. In Portland it was 65 days and in Seattle it was 50, according to the report.
And more than half of homes in all these markets are selling for more than 100 percent of their asking prices. Sixty-eight percent of San Francisco homes, in fact, are selling for more than asking. Nationally, homes typically sell for about 95 percent of asking price, and about 22 percent in all markets sell for above.
Colorado, Washington, and California dominated Redfin’s list of hot markets. In fact, Portland, Austin, Dallas-Fort Worth, and Boston were the only markets outside those states that made Redfin’s top 20.
Redfin credits a limited supply of homes for sale and strong demand from homebuyers in these markets, accelerating the pace at which homes sell.
"The market is moving so quickly that I can no longer use recent sales as a guide for what my clients should offer on a home,” said Redfin agent Karla Kirkpatrick Adams. “Instead, I call listing agents of similar homes that are under contract but haven't yet sold. I ask them the contract price, which is a more up-to-date reflection of the current market than the prices of homes that have already sold.”
Redfin also credits a better economy.
“Strong job growth and relatively affordable home prices have been lightning rods of buyer demand for Denver and Portland," said Redfin chief economist Nela Richardson. "Their economies have a lot in common with the tech enclaves to the west, Seattle and San Francisco, but there's a big difference—home prices."
The typical home in Denver and Portland costs a whopping $850,000 less than a home in San Francisco, Redfin reported. Portland and Denver also offer a respite from Seattle, where homes typically sell for around $90,000 more than in those two cities.
"The combination of jobs, affordability and a desirable western lifestyle is a triumvirate that buyers are flocking to this year," Richardson said.