Aug. 1, 2012 at 7:49 AM ET
Homes are selling faster in the majority of U.S. markets than they were a year ago. According to data in a report issued this month, which looked at the largest housing markets in the country, compared to June 2011, the average number of days homes spend on the market has fallen by nearly 10 percent. In some areas, such as Oakland, Calif., the average days on market has decreased by nearly 50 percent.
According to the data, published by real estate trends site Realtor.com, the average U.S. home spent 84 days on the market last month. In 10 housing markets, homes spent 48 days or less on the market before being sold. In Oakland, homes spent just 24 days on the market. Based on Realtor.com's report, 24/7 Wall St. identified the 10 cities where homes sell the fastest.
The metropolitan areas on this list tend to be in states that have been harder hit by the economic downturn. Five of the metropolitan areas are in California, which was sixth in 24/7 Wall St.’s recent list of states with the highest percentage of underwater mortgages. Another metro area is in Michigan, which ranked fifth in the underwater mortgage list. And another metro area is in Arizona, which had the second-highest rate of underwater mortgages.
The days houses spend on the market has declined precipitously in the past year. In all the markets on the list but one, the home's time on the market has declined. The declines ranged from 14 percent to about 48 percent. Four of our 10 metro areas had among the largest declines in the average days houses spent on the market compared to last year.
Inventory as a whole has also dropped in all of the metro areas on our list, compared to the year-earlier period. The amount of available houses for sale fell from just over 4 percent in one metro area to nearly 58 percent in another. Seven of the areas had among the top 10 inventory decreases.
Metro areas with speedy home sales also had increases in median home prices compared to a year earlier. Four of the metro areas on this list are in the top 10 in terms of fastest growing median price listing, while seven of the metros on our list are in the top 20. No metro area on this list had a declining median price compared to last year.
However, there appears to be little relationship between how fast homes sell and the median home price itself. For example, San Francisco and San Jose made our list. Of all 146 metropolitan areas surveyed, these two had the highest and third-highest median home prices, respectively. Yet Detroit also made our list, despite having the lowest home price of all 146 metro areas.
Realtor.com provided information on the median age of inventory, total listings and median home values for June, along with the year-over-year change in each of these categories. Realtor.com also provided a rank of the metro areas most searched for on its website in June. Meanwhile, 24/7 Wall St. looked at several pieces of data from RealtyTrac to gain a broader context of the economic state of the metropolitan areas. In addition to looking at the metro area foreclosure rate in June, we looked at the unemployment rate for June and median family income as of the end of 2011 .
These are the 10 cities where homes sell the fastest.
1. Oakland, Calif.
If you want a house in Oakland, you had better grab it while it’s hot. The average house in Oakland is sold 24 days after its been on the market, the fastest of all metro areas by a sizable nine days. From the time housing prices peaked in the first quarter of 2006 to the fourth quarter of 2011, home prices plummeted 45.9 percent, significantly higher than the U.S. average of 34.2 percent. Still, that is better than its California counterparts of Bakersfield and Fresno, where housing prices plunged 58.3 percent and 54.7 percent, respectively. Only 3,547 houses were on the market for an area population of 4,335,391 (which includes San Francisco). The number of available homes declined 57.92 percent compared to the year earlier period.
2. Denver, Colo.
The 33 days to sell a house in the Denver area is actually up by 10 percent, one of the very few metro areas to see an increase in the time it takes to sell a home. Denver was not as hard hit by the housing bust as many other metropolitan areas. Home prices from their peak in the first quarter of 2006 to the fourth quarter of 2011 dropped just 11.1 percent, well below the national average of 34.2 percent. A median family income of $75,000 and an unemployment rate of 7.5 percent, both well below national averages, are positive signals for a housing market likely to remain on stable footing. The only bad news is that housing prices are not expected to jump anytime soon. Home prices are projected to rise 0.6 percent in the Denver area from the fourth quarter of 2012 to the fourth quarter of 2013, compared to 4.2 percent in the U.S. in general.
3. Anchorage, Alaska
Prospective home buyers in Anchorage really do not have the option of being choosy. There are only 1,120 houses on the market, a decline of about 29 percent from the previous year. This is the fourth-smallest number of home listings in all metropolitan areas surveyed. Meanwhile, the median home price listing, at $289,500, is up a mere 0.17 percent from the year earlier, far slower than the growth in places such as Phoenix. Still, the good news is that Anchorage’s median home price is well above the U.S. average of $195,000, signaling a stable housing market. Anchorage is faring better than many of its counterparts economically. The unemployment rate of 6.13 percent is the lowest of any metropolitan area on the list.
4. Fresno, Calif.
Fresno has many similarities to Bakersfield. The median home price of $174,900 recorded in June is far lower than other California cities such as San Francisco and San Jose, but it is up 10 percent from a year earlier. Similar to Bakersfield, the 2,237 houses on the market are nearly half (49.1 percent) the number that were available last year. The 43 days on the market is a drop of 14 percent compared to a year ago. The economy in Fresno continues to be weak. About 1.8 percent of the houses in the area are in foreclosure, second only to Phoenix on this list. The unemployment rate of 15.54 percent is the highest on our list and the second highest of all metropolitan areas surveyed. Meanwhile, the median income is $52,900 as of the end of 2011, or $46,600 less than San Jose.
5. Bakersfield, Calif.
Bakersfield joins many other California cities in selling homes fast, but houses in the area are not likely to have San Francisco-like prices. The median home price of $149,500 is the lowest on this list, except for Detroit, and only a little more than a fifth of the median price of a San Francisco house. Only 1,815 houses were listed on the market, a decline of more than 47 percent from a year earlier. Meanwhile, the 44 days on the market is a drop of 22.8 percent from a year ago, compared to the national average of 9.67 percent. The labor market is far weaker in Bakersfield than it is in some of California's healthier local economies, with an unemployment rate of more than 14 percent in June, compared to about 7.5 percent in San Francisco and 8.2 percent in the United States.