A recent analysis of December data on realtor.com® indicates that the residential real estate market is following the normal holiday cool down, with less demand, reduced inventory and slower market velocity in most markets. Supply is moving slowly but still faster than last year.
The median list price in December is down slightly from November, which is consistent with the season but the decline is not as dramatic with prices stronger than usual in December. At the same time, inventory continues to move away from its yearly peak, and buyers continue to see fewer choices through the end of the year.
“While California closed out our latest ranking still firmly in control of the hottest markets, the Midwest and Florida are both seeing substantial improvement,” says Jonathan Smoke, Chief Economist of realtor.com®. “Pent-up demand and robust economic growth combined with limited supply will keep the California housing market tight in 2016, but more markets will challenge them as demand improves elsewhere.”
- Listing inventory continues to move faster than this time last year. It is expected to trend down 7 percent over November, following the usual holiday cool down. As expected, inventory also continues to move slower as markets prepare for the New Year. The median age of inventory is now 93 days, which is up 11 percent from November, but down 7 percent year-over-year.
- Median listing prices are expected to show a slight decrease over last month, falling 1 percent to $228,000, a move that still represents an increase of 9 percent year-over-year.·
- Realtor.com’s® traffic continues to show solid year-over-year growth in December, reflecting the same strong and consistent demand growth we’ve seen throughout 2015.
Realtor.com Hotness Index
Key Takeaways from realtor.com’s® December Hotness Index:
On the demand side, these markets receive 1.4 to 2.9 times the number of views per listing compared to the national average. From the supply side, these markets are seeing inventory move 29-51 days more quickly than the rest of the U.S. They have also seen days on market drop by a combined average of 15 percent year-over-year.
San Francisco maintained the top spot for the second month in a row, again this with its sister market San Jose having moved back to No. 2. With Vallejo and Sacramento ranked four and five, respectively, Northern California closes 2015 firmly in charge of the hottest markets in the country.
New entrants to the top 20 include Tampa-St. Petersburg-Clearwater, Fla., Fort Wayne, Ind., and Midland, Texas. These appear in the list as they are less impacted by the winter seasonal decline; supply is moving slightly slower but still moving relatively fast compared to the US overall, and demand remains strong, again relative to the national average.
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