San Francisco Named ‘Fastest Moving’ Real Estate Market in Spring 2015
Where in the U.S. are homes selling the fastest? Look to the San Francisco Bay Area, and you’ll find your answer. According to a recent report, 8 of the 10 fastest-moving real estate markets in the U.S. are located in California. The top three are in the Bay Area.
The report came from Ralph McLaughlin, a housing economist at Trulia, who did an analysis of the fastest-moving real estate markets in the United States. For those of us who live in California, this list may not be a surprise.
According to McLaughlin and his team, homes are selling fastest in the following markets:
- San Francisco, CA
- San Jose, CA
- Oakland, CA
- San Diego, CA
- Orange County, CA
- Seattle, WA
- Sacramento, CA
- Los Angeles, CA
- Ventura County, CA
- Salt Lake City, UT
In San Francisco, only 26% of homes were still on the market after two months. That was the lowest percentage out of the top 100 metropolitan areas in the U.S. So by this measure, the San Francisco real estate market is the hottest market in spring 2015. San Jose and Oakland rounded out the top three, giving the Bay Area dominance in the category.
Bay Area Home Buyers Compete for Limited Inventory
What makes San Francisco the fastest-moving real estate market among the major metros? Why are homes selling so quickly in this market? In short, there is plenty of demand but not enough supply.
Here are the prime movers for the San Francisco housing market in spring 2015:
Demand: Low mortgage rates and job-market growth are bringing more buyers into the market, and rising home prices create a sense of urgency. The unemployment rate for the San Francisco-Oakland-Hayward metro area fell to 4.5% in February, a major improvement from the recession high of 10.5% seen in 2010. Meanwhile, long-term mortgage rates have been hovering below 4% this year. These and other factors are increasing demand for housing across the Bay Area.
Supply: There currently aren’t enough homes for sale in the San Francisco real estate market to satisfy demand. According to Realtor.com, the total number of homes listed for sale in the metro area dropped by 20% over the last year. Building restrictions and topography are limiting new construction at a time when housing demand is soaring.
It’s a classic example of supply and demand imbalance. Many people want to buy a home in the San Francisco area, but there simply aren’t enough homes to go around. This drives prices north and reduces the number of “days on market.”
Move Quickly (But Wisely) in a Hot Market
If you’re planning to buy a home in the Bay Area, you need to have your ducks in a row. There are several simple steps to get prepared that can take the anxiety out of competing in this fast-moving market:
1. Get pre-qualified before you visit your first open house. It’s important to know how much financing you qualify for before you begin your hunt. The good news is that you can get pre-qualified online in less than 2 minutes by SoFi without completing a full mortgage application.
2. Work with an experienced real estate agent. An experienced agent will be able to help you anticipate where prices are trending and how to best position your offer. For example, a friend’s agent recently advised her to look at homes listed 20% below her budget, because homes were selling 20% over the asking price in her target neighborhood. As a result, she just closed on her first home. To find a great agent, start by asking your friends who have purchased recently.
3. Don’t let pre-approval delay your offer. Sellers will take you seriously if you have your financing lined up. With a SoFi Home Loan, you’re fully underwritten at the pre-approval stage, so you can choose to submit offers without financing contingencies. This can help you better compete with all-cash offers.
As a San Francisco-based company, SoFi is passionate about helping hardworking professionals achieve home ownership, and we’ve spent a year reinventing the mortgage process to meet the needs of busy people who are on the go.
One less thing slowing you down in a fast-moving real estate market.
Want to see how easy it can be? Check your rates in 2 minutes.
Aimee Young is CMO of SoFi, a leading marketplace lender focused on reinventing consumer financial services. She is passionate about delivering an incredible customer experience unlike any other in the industry. Case in point: SoFi mortgage loans, which offer flexible down payment options ranging from 10-50%, including on jumbo loans. A self-described real estate addict, on most weekends you’ll find her at open houses in the Bay Area.