Dive Brief:
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California’s housing market continues to boom, with eight of the state’s cities ranking among the top 10 busiest markets in January, according to a survey by real-estate listing website Realtor.com.
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San Francisco held its position at the head of the list with San Jose, CA, Vallejo, CA, Dallas and San Diego rounding out the top five spots. Denver was the only other city to break California’s run of the top 10.
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Despite typically being the slowest month of the year for homebuying activity, homes in January are selling 4% faster compared to a year ago as supply levels sink and demand grows.
Dive Insight:
Concerns over the limited availability of housing stock are expected to hold in 2017, with Zillow recently reporting that available inventory is down 4.6% from a year ago. According to its latest analysis, Realtor.com anticipates a 9% decline in listings from December 2016 to January 2017 and an 11% year-over-year drop this month.
While tight supply has helped boost prices in recent months, there are signs that low inventory levels are starting to impact sales of new single-family homes after the latest Commerce Department figures showed new-home sales dropping 10.4% to a seasonally adjusted annual rate of 563,000 in December.
There are also signals that the rise in first-time buyers looking to snap up a property ahead of the traditionally busier spring selling period is waning. Realtor.com noted that the group accounted for 44% of active homebuyers in January compared to 55% in October, when the survey was last conducted. The recent rise in mortgage rates from historical lows was largely credited for the drop.
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