April 8th, 2014
As the second quarter of 2014 begins, the nation’s housing market is beginning to see the foretold slowdown that would follow 2013′s steep home price and sales gains.
While activity may be cooling at the national level, there are some local markets that are still showing big strides for housing growth. Online real estate brokerage Redfin recently noted eight markets that have remained competitive well into the start of the second quarter. Sales in these eight markets are still occurring at a rapid pace while inventory is tight and job and population growth are on a positive trend. Furthermore, sales activity has been stable.
Here’s Redfin’s eight markets that are speeding up, in no specific order:
Austin has the fastest sales
In regard to sales speed, Austin homes had the fewest average days on market in February, at 26 days, a noticeable drop from 40 days a year prior. The portion of homes in the Bat City selling in less than two weeks was 46.3 percent. Austin was closely followed by Denver with 27 days on market.
Raleigh homes had the slowest average sales pace of Redfin’s top eight in both February 2013 and February 2014, with 94 and 82 days on market, respectively. Only 22.5 percent of homes sold within two weeks. However, February’s figure was a significant improvement compared to 9.7 percent the year prior.
Inventory declined across all target markets
Tight inventory has been a staple of the housing recovery on both the national and local levels. Among seven of the eight target markets – Denver was excluded due to data anomalies – Seattle had the smallest year-over-year decline in inventory, at 5.7 percent. Houston, on the other hand, had the largest loss of 23.5 percent, while concurrently experiencing a year-over-year sales gain of 6.4 percent.
Employment and life changes driving these markets
Redfin noted that these eight metro areas have maintained fast and stable growth rates due to several factors. Jobs and birth rates have both been contributed to population growth, which is the overarching catalyst across all eight markets.
Employment gains in the target cities ranged from 2.3 percent and 4.5 percent since 2013, exceeding the national rate of 1.6 percent. Birth rates have simply been outpacing death rates, further increasing population size.
Other factors that have driven buyers to these markets include lifestyle benefits, affordability, and desire to be close to family and friends.
“Here in Raleigh, young couples who relocate here for a job often find their parents packing up and following,” said Redfin agent Allen Wyde. “These ‘traveling grandparents’ can’t resist being nearby their grandchildren.”
Buyers can expect competition
The eight target markets present several benefits sought by buyers – and, as shown by the population increases, people are migrating en masse to take advantage of the favorable housing conditions. Redfin suggested that prospective buyers in these markets gear up for bidding wars.
“I’m preparing my clients to make decisions quickly and to put their very best offer forward from the start,” said Tara Waggoner, a Redfin agent in Houston. “I also advise them all to write a personal cover letter to the seller. It’s a great way to make an offer stand out among multiple bids.”
Although these conditions will likely make finding a home more difficult, affordability and employment may make the challenge worthwhile. Additionally, securing financing via a preapproval letter prior to the home search can help with staying ahead of the competition and landing a spot in Raleigh, Dallas or many other markets across the U.S.