A roundup of the latest research is bright for sellers, dim for buyers.
The nation’s housing supply is dwindling, and demand is skyrocketing. Old news, right? Here’s the new news: Real estate researcher at Zillow tell us that in 2017, nearly a quarter of those shopping for a home paid well above the asking price.
On average, they paid about $7,000 more than a home’s list price. But in the hottest markets, the leap was significantly higher: $41,000 higher in San Francisco, $20,100 in Seattle, and $15,000 in Boston.
(The town where you were least likely to pay more than what the seller was asking? Miami.)
Home values in general were already up 6.5 percent over the past year, delivering a median home value nationally that is now $206,300.
As a result, the typical home sold in 80 days. That included the time it took to close the deal.
Meanwhile, anyone hoping to buy spent more than four months looking and had to make multiple offers on multiple homes before sealing the deal.
“Low interest rates and strong labor markets with high-paying jobs have allowed homebuyers in some of the country’s priciest housing markets to bid well over asking price,” says Zillow senior economist Aaron Terrazas. “In the booming tech capitals of the California Bay Area and Pacific Northwest, paying above list price is now the norm.”
This year promises more of the same. Here’s some more interesting housing news…
Inventory shortage at “crisis levels”
There are 10 percent fewer homes on the market now than a year ago. But in some of the tightest markets, the number is closer to 40 percent fewer, according to a December market report from Zillow. This is a continuation of a three-year trend in declining housing stock.
Fewer than one in five housing experts think enough homes will be built to put a dent in the supply problem in 2018.
Not surprisingly, the shortage is most pronounced in places where home values are appreciating the fastest.
The most competitive markets
What makes one city or housing market more competitive than another?
LendingTree combed through 1.5 million loan requests looking for three things:
- buyers who put the most money down on their homes
- buyers with the shiniest credit scores (above 680)
- buyers who shopped for their loan before shopping for a home, so they were able to pull the trigger quickly when they spotted their target.
Then LendingTree parsed the numbers geographically. The takeaways:
- Six of the 10 most competitive housing markets are in California. All of the top 10 were in the west, with third-ranking Denver falling the furthest east.
- The tech industry is a big driver of competition, likely contributing to San Francisco, Seattle, Portland and Boston landing spots high on the list.
- San Francisco topped the list thanks to buyers who show up ready to pay an average of 19 percent down and where nearly two thirds had prime credit scores.
Loans are easier to get
With all this doom and gloom about trying to beat the other guy to the closing table, the National Association of Realtors reports this good news: Most people (66 percent) said getting a loan wasn’t difficult, or it was at least easier than they expected.
When they buy the home, they’re coming to the table with about 10 percent down payment drawn largely from either savings or the sale of a previous home. And when they buy, the median price is $235,000.
What a home is worth in different places
Looking for places where your money will go the furthest? Trying to anticipate the cost of a home in the state of that sweet job offer?
GoBankingRates has parsed the median home value in each state. The most affordable? Arkansas, Michigan and Georgia (as long as you’re not talking Atlanta) at $121,000, $132,400 and $157,800 respectively.
Hawaii is going to cost you $718,400. Oregon is up there, too, with home values increasing 7 percent in the past year to a median home value of $318,200.
Utah saw median home prices grow 12.7 percent in the past year — one of the highest increases in the country. The median home value is now $276,400.
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Article last modified on February 6, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Bad News For Home Buyers: You’ll Pay More Than You Can Even Imagine - AMP.