Anyone looking to buy this year has likely already encountered some of the many pitfalls which the California housing market has to offer – tight inventory and high prices to name a few. It would seem that buying in California isn’t about to get any easier this spring, as a new study indicates that homes in California are moving faster than anywhere else in the nation, and the market shows no signs of slowing down – good news if you or your clients are looking to sell.
According to a study released by Trulia earlier in April, California is home to eight of the top ten fastest-moving housing markets in the nation, with all of the top five residing in the Golden State. The list includes San Francisco, San Jose, Oakland, San Diego, Orange County, Sacramento, Los Angeles and Ventura County respectively.
In San Francisco, inventory moved at the fastest pace with only 26% of homes remaining for sale after being listed for two months in April. In Los Angeles and Ventura Country, there was a more modest 43% of homes remaining on the market after two months, which is still significantly faster than the 60% average nationwide. The most significant jump between succeeding markets was San Diego and Orange County – placing #4 and #5 on the list respectively – seeing 33% and 41% of homes remaining unsold after two months.
So what’s causing the high turnaround in the California housing? The answer is simple, supply and demand.
“Inventory and new supply is quite tight. That’s driving, on the supply side, the fast-moving markets,” said Ralph McLaughlin, housing economist at Trulia. “And then California is a leading market for job growth, and, especially in the Bay Area, a lot of those are higher-paying jobs that allow people to get mortgages and buy homes. It’s a double-whammy effect.”
The rate at which homes are selling is only getting faster. According to Trulia, three-fourths of the nation’s top 100 housing markets had fewer homes for sale after two months of being listed than one year ago. This includes all of the top ten fastest-selling markets. San Diego saw the biggest drop among the top ten, which declined 11% from the year before.
If buyers want to close a deal this spring, they’ll have to be prepared to move quickly.