The housing market is a mixed bag these days, according to a new report from Zillow.
Home prices have ballooned in the priciest of U.S. metropolitan areas, particularly along the California coast. Monthly home value growth is highest in San Jose, where it tops out at 3.3%. This is followed closely by San Francisco, Seattle, San Diego and Los Angeles, which have price growth of 2% or more. In addition to the fact that these five metros happen to be the most expensive markets among the 50 largest in the country, they ranked among the top 10 for share of homes sold over asking price in February.
"Shoppers in the market today should expect competition, especially for attractive listings on the lower end of the price range — a rare opportunity these days," said Skylar Olsen, Zillow's chief economist. "That's kept prices ticking upward in most areas, despite affordability challenges. There are places where new construction relieved some pressure, and where homeowners are less locked into their mortgage, but not in the nation's most expensive metros. In costly areas, homeowners hold extensive mortgage debt at previously low rates, and the pressure is dialed up even further."
The American South is experiencing a totally different situation, with a subdued price appreciation combined with inventory growth not seen since the outset of the pandemic.
New Orleans, San Antonio, Tampa, Orlando and Jacksonville exceed 0.5% appreciation month over month. Analysts attribute this growth in part to new construction.
Recovering inventory has helped ease competition and bring price appreciation under control. Buyers have more choices than they did before the COVID-19 pandemic in New Orleans, Austin and San Antonio, while Tampa, Orlando and Jacksonville are tied for the second-smallest drop of 9%.
In terms of how quickly homes are flying off the market, the hottest metros are seeing extremely short durations for listings that sell. Sold homes were listed for a week or less in 17 major metros.
Pierce cuts were most common in Tampa, Phoenix, Jacksonville, San Antonio and Orlando. Nearly 27% of homes sold over list price in February, compared to less than 19% in 2019.
