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Bay Area Housing Market Soaring

NationalMortgageProfessional.com
Apr 22, 2015
Tony Bennett may have left his heart in San Francisco, but a new Bankrate.com data analysis found that relatively few first-time homebuyers will get a chance to fall in love with the Bay Area metro

Zillow's Spring analysis of buyers' and sellers' bargaining power in housing markets across the country found bidding wars and red hot prices in the Bay Area, but also in new hot markets outside California. Denver, Seattle and Dallas-Fort Worth joined San Jose and San Francisco in the top five best markets for sellers. Homes there are flying off the market at or above asking prices, giving sellers the upper hand. In sellers' markets, homes sell an average of 48 days faster than those for sale in buyers' markets.

On the other end of the spectrum, buyers will face less competition and have room to bargain on prices in the nation's top buyers' markets: Philadelphia, Chicago, Cleveland, and Miami. In buyers' markets, home shoppers can expect an average 3.9 percent discount off the final sale price. In sellers' markets, the average discount is less than one percent.

In Zillow's analysis, a sellers' market is not necessarily one where home values are rising, but one where homes sell quickly at prices very close to (or greater than) their listing price. In buyers' markets, homes are on the market longer, price cuts occur more frequently and sell for less than their asking price.

"In general, while the market remains more in sellers' favor, it is slowly tilting toward buyers this year, thanks to more inventory, slower home value gains and less competition from investors," said Zillow Chief Economist Dr. Stan Humphries. "But what's true in one market may not be true in others, and buyers and sellers will face different challenges and opportunities depending on local conditions. Sellers in buyers' markets should remain patient and take even small steps to make their home more attractive to buyers and help it stand out. Buyers in sellers' markets should never feel pressured to pay more than they're comfortable with and capable of."

Nationally, as expected, real estate markets are increasingly easy to get into, with home prices leveling off, giving hope to homebuyers who have fought low inventory and fast rising home values. The U.S. Zillow Home Value Index (ZHVI) was up 3.9 percent year-over-year for the first quarter of 2015, to $178,400. Home values are expected to grow 2.6 percent over the next year.

Rents rose almost as much as home values over the last year, up 3.7 percent to $1,362 median monthly Zillow Rent Index (ZRI). By the end of the year, Zillow expects growth in rents to outpace growth in home values.

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