Home Prices Surge, More Sellers Contemplate Listing
The number of homes for sale in April surpassed those that went under contract in April, according to ZipRealty, a real-estate brokerage. These figures indicate that the rising prices may be sparking momentum in the selling market—inducing more Americans to list their homes.
The number of homes listed in April increased by 8% from the same time last year. ZipRealty measured listings in 24 major metro areas. The report found that homes that sold in April were on the market for an average of 32 days, compared to 48 days last year. Although rising prices are certainly pushing sellers to test the market, there are other factors that are equally or more powerful motivators.
The fact that homes are spending less time on the market is another profound reason that seller’s are getting their feet wet in the sizzling market.
“A market in which the sale prices are happening very close to the list prices, a market in which the list prices seem to be moving sequentially higher, and a market in which any of those houses are selling speedily is one that is bringing sellers back,” said Lanny Baker, chief executive of ZipRealty.
The key note to make on this theory is the fact that if houses stay on the market for fewer days, the process will be easier, and more sellers will list. Baker goes on to say, “One of the ‘costs’ for a seller testing the marketing is that it’s pretty darn disruptive. Once you put your house on the market, you have to clean it up, you have people traipsing through—it helps if that’s a 24-day process instead of a 120-day process.”
Home prices have continued to increase as more buyers are chasing fewer homes. There were nearly one-third fewer homes for sale in April in markets like San Francisco, Las Vegas, Los Angeles, San Diego and Orange County. Homes in nearby San Francisco are selling for 3.6% than their listing price. Homes in Los Angeles, San Diego, Las Vegas and Sacramento sold at their list price.
Baker says his worry is that this surge towards lower-but-arguably-more-sustainable-growth gets mistaken as a weakening, which shakes the confidence of the market.