Real estate economists have drizzled good news and okay news throughout this year, but realtor.com Chief Economist, Jonathan Smoke, is offering the best news in years, proclaiming this summer to be the best buying season since 2006, with robust demand and a corresponding growth in supply. The momentum of this spring appears to be carrying over into summer as sales continue to do well.
“Factors lending themselves to the market’s upswing are the psychological effect of recently increased mortgage rates as well as the specter of the Fed raising interest rates later this year. Although demand has been strong all year, in June we’re finally beginning to see an uptick in supply as sellers become more confident about home prices,” said Smoke.
First time buyers are driving demand as they once again make up a healthier portion of buyers, and when surveyed by realtor.com, 65 percent of older millennials (ages 25-34) indicated in June that they intend to purchase a home within 90 days – an increase of 12 percent compared to just six months ago.
Add into the mix the National Association of Realtors’ report today that pending home sales (contracts signed) rose 10.4 percent in May compared to May 2014. Smoke observes, “Today’s announcement regarding May’s Pending Home Sales —the highest level since April 2006—points to further increases in new and existing home sales in June. The data – corroborated by both our earlier May findings as well as our Advance Read on June Trends – all show both demand and supply improving, foretelling further gains this summer.”
Where are the hottest real estate markets?
According to number of views per listing on realtor.com and the median age of inventory in each market in June 2015 are:
Economic-powered gains reflected in these top markets
California continues to dominate the “hottest” markets, representing eight of the top 20 spots, and Denver got bumped out of the top spot by San Francisco in June. Texas holds four spots in the top 20, Michigan is represented twice, and Denver dominates in the top three, yet again.
Realtor.com observes, “The strength of all these markets is a clear reflection of economic-powered gains, but the Texas and Colorado story is more of a continuing narrative indicative of the resilience and diversified nature of the states’ economies particularly evident with the reduced contributions from the oil industry. Michigan’s performance is related to economic recovery and very strong affordability.”
The median list price rose to $233,000 (up 7.0 percent annually, and 2.0 percent monthly), and median days on market stagnated at 66 days. Realtor.com points out that this summer looks hot, with ample opportunity for buyers, as listing inventory continues to grow.