West Coast housing markets continue to be the most competitive for home sales nationally while those on the East Coast and in the Midwest lag, according to a new report from Zillow ranking markets by how long for-sale homes there are on the market and the share receiving a price reduction.
San Francisco and San Jose, CA, topped the list with homes there on the market for 51 and 50 days, respectively, and with 5.4% receiving a price cut in the former market and 6% in the latter. Denver, Seattle and Sacramento, CA, rounded out the top five. Meanwhile, homes in Baltimore, Miami, Philadelphia and Chicago spent more than 100 days on the market with Philadelphia seeing the largest share of price cuts at 13.3%.
Zillow noted that the balance in the country’s top markets is expected to shift in favor of buyers by 2019 amid an overall slowdown in home-value appreciation. Currently at around 7%, price growth is expected to slow to 3.5% by the end of this year.
Strong job growth on the West Coast is drawing new residents, putting pressure on already tight inventory and strengthening demand for new residential construction.
Seattle, for example, is one such market vying to keep up with surging demand. Realtor.com recently noted that the Pacific Northwest hub has the smallest share of its housing stock for sale of the country’s top 150 metros.
That’s creating plenty of tension in the market, with the city serving as home to one-third of the most competitive neighborhoods for housing nationwide, according to real estate listing website Redfin.
Zillow’s expectation for price growth to slow this year matches up with the latest forecast from CoreLogic’s Home Price Index, which calls for home prices to rise 4.7% through December 2017 after climbing 7.2% year-over-year in December 2016. However, price growth in Washington (10.8%), Colorado (8.9%) and six other states came in above the national annual average in December, suggesting that the pullback may be more gradual where the price surges have been most significant.
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