The housing market has been improving significantly on a national level for about a year now, and with prices rising and interest rates extremely low, many buyers may think it’s a very good time to enter the market to find affordable options. That, in turn, will likely be a boon to sellers in many cities across the country.
Sellers are now beginning to see far better returns on their listing prices as competition among buyers rises, according to a report from real estate brokerage firm ZipRealty. With prices low in several markets, the amount of options buyers may have when shopping for a home will be limited, so as more enter the market, there will be a more significant number of likely suitors, driving offers higher in general.
Today, a large and growing number of sellers are seeing returns approaching 98 percent or more of their home’s listed asking price, and the number of days the median home spends on the market shrank 23 percent in 2012 to just 44 days, down from the previous year’s 57 days, the report said. Through December 2012, the list to close price ratio stood at 98.3 percent, up from the previous year’s 97.1 percent.
“A limited inventory of homes on the market, combined with the extremely low cost of mortgage financing, has resulted in homes selling above asking price in many western markets, boosting the average listing to closing price ratio,” said Lanny Baker, chief executive officer and president of ZipRealty. “The median amount of time that homes are listed on the market before they sell has shortened by more than two weeks since last year, and in some areas we are seeing one-in-five newly listed homes sell in less than seven days. Multiple-bid situations are also increasingly common in the markets we reviewed.”
Among the 10 large metropolitan areas with the best list to close price ratios were San Francisco, San Diego, Sacramento, Las Vegas, Los Angeles, Orange County, Denver, Tucson, Portland and Seattle, the report said. Other struggling markets, such as Phoenix, are seeing improvements in other ways, including selling more quickly once placed on the market.
Experts believe that home prices will continue to improve over the course of 2013, but some also caution that the improvements this year may not be in line with those seen over the last 12-plus months.