In Which States Did Properties Sell Most Quickly in August 2018?

In Which States Did Properties Sell Most Quickly in August 2018?

In a monthly survey of REALTORS®, respondents reported that properties were typically on the market for 29 days, just a day shorter time compared to one year ago (30 days), according to the  August 2018 REALTORS® Confidence Index Survey.[1] This indicates that in many states, the supply of homes for sale is still inadequate compared to the demand for homes. However, the difference in median days in the current month compared to the same month last year has started to narrow as homebuying demand has eased and the inventory of homes for sale has slightly increased. In January and February of this year, properties were selling about one week less compared to the length of time in the same period one year ago.

During the June–August 2018, properties typically sold within one month in 32 states and in the District of Columbia. Properties sold most quickly in the states of South Dakota (19 days), Washington (20 days), Colorado (21 days), Utah (21 days), Ohio (21 days), Idaho (22 days), Massachusetts (21 days), and Rhode Island (21 days).

 

Based on listing time on Realtor.com[2], properties sold more quickly in 385 out of 500 metro areas (77 percent)—still most of metro areas, but fewer than the number of metro areas that had year-on-year faster selling time in August 2017 (405 metros). Compared to the median days on market one year ago, properties sold more quickly in August 2018 even in the high-price areas of San Jose-Sunnyvale-Sta. Clara, San Francisco-Hayward, and San Diego-Carlsbad.

 

Scroll down the list of metro areas in the interactive table below or hover over the map to view the median number days properties were listed on Realtor.com in July 2018 and one year ago.

 


About the Realtors® Confidence Index Survey

 

The RCI Survey gathers information from REALTORS® about local market conditions based on their client interactions and the characteristics of their most recent sales for the month. The August 2018 survey was sent to 50,000 REALTORS® who were selected from NAR’s1.3 million members through simple random sampling and to 8,386 respondents in the previous three surveys who provided their email addresses. There were 4,639 respondents to the online survey which ran from September 1-11, 2018. NAR weights the responses by a factor that aligns the sample distribution of responses to the distribution of NAR membership. The REALTORS® Confidence Index is provided by NAR solely for use as a reference. Resale of any part of this data is prohibited without NAR’s prior written consent. For questions on this report or to purchase the RCI series, please email: Data@realtors.org.

 

[1] In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.

[2] To access Realtor.com data, go to https://www.realtor.com/research/data/.

 

 

Property Values By State from 2005-2017

Property Values By State from 2005-2017

Home price appreciation is an important topic in today’s economy. Using data from the American Community Survey (ACS), we can analyze the gains and losses of property values over time. I estimated the median property values by state in 2017 using the FHFA index and the median property values from the (ACS). I then calculated the growth rate from 2005 -2017. [1]

The states with the highest estimated median property values in 2017 are Hawaii ($637,892), District of Columbia ($605,756), California ($522,431), Massachusetts ($396,992), and Colorado ($342,967).

The states with the lowest estimated median property values in 2017 are Alabama ($141,714), Oklahoma ($137,387), Arkansas ($129,902), West Virginia ($122,791) and Mississippi ($118,019).

On a regional level, the estimated price growth appears to be the strongest in the South, West, and Midwest. Price growth is weakest in the Northeast states. Overall, all regions are displaying growth in property values with only a few states showing no growth or loses. Below is a breakdown of the Census four regions by state.

  • In the South, which typically leads all regions in sales, Texas led the region with 63 percent estimated price growth from 2005 to 2017. Although Florida experienced strong price growth since 2012, home prices have only increased by 14 percent since 2005 when house prices were still generally at peak levels.

  • In the West, the least affordable region[2], Montana led all states with 71 percent price growth from 2005 to 2017. Despite the strong price growth in California since 2012, prices have only increased by 9 percent since 2005. Nevada shows a negative 5 percent price change over this time.

 

  • In the Midwest where affordability is most favorable, North Dakota led all states with 111 percent price growth from 2005 to 2017. The increase is likely due to the boom in shale oil production up until 2014 when oil prices started collapsing. Illinois, while having the smallest growth in the region had an estimated 7 percent price growth over this time.

  • In the Northeast where price growth is typically slow, Pennsylvania lead the region with a 40 percent price growth from 2005 to 2017. Rhode Island was the only state to have a decline of negative 4 percent price change over this time.

Click on the data visualization below to view the historical prices by state from 2005-2017.

 


[1] I used the FHFA expanded data set, not seasonally adjusted data.

[2] Based on NAR housing affordability index

What Would an Increase in Mortgage Rates Mean for Homebuyers?

What Would an Increase in Mortgage Rates Mean for Homebuyers?

Experts forecast that the U.S. economy is in for yet another solid year of strength, albeit not at the same level as in 2017. NAR expects that the mortgage rate for a 30-year fixed mortgage will rise to 4.4 percent in 2018 from 3.9 percent in the last quarter of 2017[1], an increase of 50 basis points this year. However, how will this change affect the monthly mortgage payment of homebuyers?

It is estimated that, on a 30-year fixed-rate mortgage for $380,000, each half-point increase adds about $100 to the monthly payment. A homebuyer who wants to purchase a home with a value of $380,000 would pay $1,600 every month for the mortgage payment at a 3.9% mortgage rate[2]. Assuming the mortgage rate increases to 4.4%, the buyer would pay $1,700 per month in order to buy the same home. Among 177 metro areas, we see that 89% of these areas have a median home value lower than $380,000. This means that most homebuyers would see an increase of less than $100 in the monthly mortgage payment. While mortgage rates are still historically low, the expected increase in mortgage rates should not discourage people from buying a house. We calculated the increase in the monthly payment for 177 metro areas when the mortgage rate increases from 3.9% to 4.4%. As we move to metro areas with higher prices, the dollar amount that is added to the monthly payment rises as well. In Youngstown, OH and Decatur, IL, a typical homebuyer will need to pay an extra $23 every month for a home with a value of $89,000. However, in the San Jose, CA metro area where the median home price is $1.17 million, the monthly payment would increase by $305.
Metro areas with high-priced homes Depending on the type of homebuyer (first-time or repeat), homebuyers in metro areas with high priced homes may seek a lower priced home or stay longer in their existing home if they already own a house. First-time homebuyer First-time homebuyers may look for a lower priced home or a smaller home, one with fewer amenities or a home in a more affordable area with a longer commute. We calculated how much the maximum purchase value would need to be reduced in order to retain the same monthly payment with a higher mortgage rate. For a 50 basis points increase in the mortgage rate, homebuyers need to purchase a home that is about 6% lower in price if they want the same monthly payment as they would pay at a lower rate. For instance, in San Francisco, CA metro area, the median home value is $900,000. The monthly payment for a typical homebuyer is $3,820 at a 3.9% mortgage rate and a 10% down payment. However, at a 4.4% mortgage rate, the typical homebuyer needs to search for homes with a maximum purchase price of $847,700 to continue paying $3,820. Thus, the maximum purchase price is cut by $52,300. Repeat homebuyer Rising mortgage rate may push existing owners in these metro areas to stay in their homes longer. Although mortgage rates are still relatively low, some owners may not be able to get the same favorable terms compared to their existing mortgage, especially owners who bought their home in 2012 when mortgage rates reached their lowest level. In the meantime, these owners, who may stay longer in their home, will likely build more equity while home prices continue to grow as a result of the limited inventory. A typical homeowner in San Jose, CA metro area has accumulated $493,000 in equity as a result of the price appreciation in the last five years while the price of his home increased by $165,000 within the last year. All in all, we see that many homebuyers in most metro areas will not be significantly affected by a higher rate of 4.4%. The visualization below allows you to see how much the monthly payment changes in 177 metro areas when the mortgage rate increases to 4.4% from 3.9%.
DATA BY METRO AREA
 
[1] Based on the average interest rate on a 30-year conventional home loan that Freddie Mac published for Q4 2017.
[2] Assuming 10% down payment.
In Which States Did Properties Sell Most Quickly in December 2017?

In Which States Did Properties Sell Most Quickly in December 2017?

Amid strong demand and tight supply, REALTORS® reported that properties that sold in December 2017 were typically on the market for 40 days in November 2017, down from 52 days compared to the same month last year, according to the  December 2017 REALTORS® Confidence Index Survey.[1] The median days on market have been broadly on a downtrend since 2011 when the properties typically were on the market for three months from May 2011, when this question was first asked in the RCI Survey, through March 2012. For the full year of 2017, the median days on market was 35 days (43 days in 2016). During October–December 2017, properties sold in less than 31 days in 15 states: Washington, Oregon, California, Nevada, Utah, Colorado, North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Indiana, Kentucky, Rhode Island, and Massachusetts. Properties also sold in less than 31 days in the District of Columbia.

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Amid fewer listings for sale in many areas, properties continued to sell at a faster pace in many metro areas. Of the 500 metro areas tracked by Realtor.com, days on market have dropped in 388 areas, 78 percent of the areas. The metro areas where properties were listed for the shortest time in December 2017 compared to one year ago are San Jose-Sunnyvale-Sta. Clara, CA (37 days), San Francisco-Oakland-Hayward, CA (45 days), Vallejo-Fairfield, CA (45 days), Nashville-Davidson-Murfreesboro-Franklin, TN (46 days), Ogden-Clearfield, UT (47 days), Provo-Orem, UT (48 days), Stockton-Lodi, CA (48 days), and San Diego-Carlsbad, CA (49 days). Use the data visualization below to check out the data across metro areas.

[1] In generating the median days on market at the state level, NAR uses data for the last three surveys to have close to 30 observations. Small states such as AK, ND, SD, MT, VT, WY, WV, DE, and D.C., may have fewer than 30 observations.
 

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