REALTOR.COM® Data Preview: Key California Markets Slowing Amid Hottest National Market Conditions in Decades

REALTOR.COM®, San Francisco, Bay Area, Hotness Index

REALTOR.COM®, San Francisco, Bay Area, Hotness Index

May Data Shows Double-Digit Price Gains, Continued Inventory Shortage and Homes Selling Five Days Faster than Last Year

National residential real estate prices reached new heights in May according to new data fromrealtor.com – but some perennially sizzling housing markets like California’s Bay Area showed signs of cooling in comparison to areas like Detroit, Midland, Texas, Grand Rapids, Mich., and Fort Wayne, Ind. Boston also jumped into the top five hottest markets for the first time since the index was created.

While realtor.com’s list of the country’s 20 hottest real estate markets in May still features nine from California, six of those have dropped at least two spots since April. In contrast, during that time Midland, Texas, jumped from number 32 to number eight, Detroit went from number 26 to number 18, Grand Rapids shot up from 20 to 13, and Fort Wayne went from 14 to 11, all thanks to the availability of relatively affordable options. Boston also entered the top five for the first time since realtor.com began tracking its inventory and demand data on a monthly basis in 2012, thanks to its strong job market.

Nationally, in May, home prices were 10 percent higher than one year earlier. Earlier this spring, the median list price for homes nationwide broke the $250,000 mark for the first time; now the median list price is $275,000.

Homes also sold 8 percent more quickly than this time last year. The median age of properties on realtor.com in May ended at 60 days, which indicates that properties are selling five days faster than May 2016 and two days faster than last month.

The total number of homes on the market has increased during the late spring, but it remains substantially lower than one year ago. While 560,000 new listings hit the market in May – a slight jump over last year – much of this inventory is being quickly swallowed up or priced beyond the reach of the average buyer.

Javier Vivas, manager of economic research at realtor.com, said:

“This is officially the most competitive, fastest-moving spring housing market in decades. Some places like the Bay Area have become too hot to handle – and now a lack of inventory and affordability are allowing other markets to catch up.

“Last month there were more prospective buyers and homes are selling more quickly than during any other May since the recession. For the first time, one in three homes nationwide are selling in under 30 days. The lack of affordable homes for sale remains a critical issue, particularly for a growing number of first-time home buyers and millennials, who are lining up for starter homes but can’t break in.”

Key Statistics:

  • Median age of inventory is estimated to end at 60 days, down 8 percent from last year and down 3 percent from last month.
  • Median listing price for May should reach a record high of $275,000, a 10 percent increase year-over-year and a 2 percent increase month-over-month.
  • Listing inventory in May should show a decrease of 11 percent year-over-year. Additionally, May inventory should show a 5 percent increase over April.
  • Realtor.com’s Hottest Markets receive 0.9 to 3.6 times the number of views per listing compared to the national average. In terms of supply, these markets are seeing inventory move 20 – 36 days more quickly than the rest of the U.S. That’s 2.5 days faster on average than in April.

REALTOR.COM® HOTNESS INDEX

20 Hottest Markets
May Rank
May Median Age of Inventory
April Rank
April Median Age of Inventory
Vallejo-Fairfield, Calif.
1
28 days
1
26 days
San Francisco-Oakland-Hayward, Calif.
2
24 days
2
21 days
Boston-Cambridge-Newton, Mass.-N.H.
3
33 days
6
30 days
Sacramento–Roseville–Arden-Arcade, Calif.
4
33 days
3
32 days
Kennewick-Richland, Wash.
5
34 days
17
29 days
Colorado Springs, Colo.
6
32 days
8
28 days
Columbus, Ohio
7
36 days
12
33 days
Midland, Texas
8
34 days
32
22 days
San Jose-Sunnyvale-Santa Clara, Calif.
9
24 days
7
26 days
Stockton-Lodi, Calif.
10
36 days
5
38 days
Fort Wayne, Ind.
11
39 days
14
36 days
Dallas-Fort Worth-Arlington, Texas
12
38 days
9
38 days
Grand Rapids-Wyoming, Mich.
13
31 days
20
25 days
Santa Cruz-Watsonville, Calif.
14
33 days
11
31 days
Ann Arbor, Mich.
15
37 days
16
33 days
San Diego-Carlsbad, Calif.
16
36 days
13
36 days
Denver-Aurora-Lakewood, Colo.
17
27 days
10
28 days
Detroit-Warren-Dearborn, Mich.
18
40 days
26
34 days
Santa Rosa, Calif.
19
37 days
4
40 days
Chico, Calif.
20
37 days
18
35 days

**Realtor.com reviewed listing views by market as an indicator of demand and median days on market as an indicator of supply. This analysis led to the identification of the 20 hottest medium-sized to large markets in the country.

Key Takeaways from realtor.com’s® May Hotness Index:

  • California dominated the list with nine markets, but seven other states were represented (Texas, Colorado, Ohio, Michigan, Massachusetts, Indiana and Washington).
  • Six of the nine California markets (San Jose-Sunnyvale-Santa Clara; Stockton-Lodi; Santa Cruz-Watsonville; San Diego-Carlsbad; Santa Rosa; and Chico) dropped two or more spots this month due to seasonality and a slight softening of market activity relative to other markets.
  • Vallejo-Fairfield retained its spot as the nation’s hottest market.
  • Boston, Mass. moved up three spots, entering the top five for the first time since realtor.comstarted tracking the hotness index. Other top movers in May include Kennewick, Wash. and Columbus, Ohio, both entering the top 10.
    · The new entrants to the top 20 in May were Midland, Texas and Detroit, Mich., up 24 and eight spots, respectively, since April.
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