February may be the last full month of deep, dark winter—hallelujah, praise the Lord!— but we’re already seeing signs of an early spring here at realtor.com®, with rapidly growing demand for the relatively few available homes that are on the market.
Inventory is growing slowly—but not enough to keep up with demand. This dynamic nudged up the median list price in February to $230,000, a 1% increase over January and an 8% jump over the previous February.
“I would use the phrase ‘pent-up-demand’ liberally—we’re seeing it come through in the marketplace,” says Jonathan Smoke, our chief economist, who analyzed realtor.com data for the first three weeks of February.
“The people who didn’t buy last year were frustrated because they were outbid or couldn’t find a home that met their needs,” he says. “So they more or less took the holidays off, and are back with way more intensity.”
And our top tip for home buyers this year is: Get started already! Buyers have already gotten an unexpected bonus with the low mortgage rates of recent weeks.
“Now is a great time to get pre-approved for a mortgage and understanding how those rates translate into buying power,” Smoke says. “I think buyers will be pleasantly surprised that they can afford a bigger loan than they thought they could qualify for just a couple of months ago.”
As for sellers, while it might seem that they should just sit tight and wait till buyers’ desperation reaches its peak in the summer, consider this: According to our user surveys, 80% of sellers intend to go on and buy another home. That means that they, too, need to get ahead of the competition in the market. It’s the real estate circle of life!
When the final numbers for the month are in, listing inventory in February is expected to show a 1% increase over January. Homes have already started to move off the market faster than last month, and faster than this time last year. The median age of inventory for February is estimated at 96 days, down 4% from January and 6% year over year.
To find out where in the country has the best availability (good for buyers) and the highest demand (good for sellers), Smoke and his team assessed our data. They used the number of listing views by market as an indicator of demand and median days on market as an indicator of supply. This analysis led to the identification of the 20 hottest medium to large markets in the country—where listings are viewed two to five times more often than the national average, and homes move off the market 44 to 78 days more quickly than elsewhere in the U.S. They have also seen days on market drop by a combined average of 7% year over year.
You may see a lot of familiar names in the top five—San Francisco sits at No.1 for the fourth month in a row, and markets like Denver, San Jose, and Dallas continue their uninterrupted upward climb.
“These are the places that are head and shoulders hotter than the rest of the country—and they’re also accelerating,” Smoke says.