After a terrible month of March for the U.S. residential real estate market, agents, brokers and lenders can look at April and say "now that's more like it."
The data tells the tale, with April's home sales up 7% compared to 2015, according to Realtor.com
"For sale" homes are moving faster, too. Realtor.com says that houses are lasting on the market, on average, for 68 days - that's five days faster than in April 2015, and six days faster than March 2016. Median-home prices are up, as well, with homes listing for $245,500, 9% higher than last year and 2% higher than the previous month.
"A robust buying season has already fully bloomed this spring," says Jonathan Smoke, chief economist at Realtor.com. "Pent-up demand, lower mortgage rates and strong employment continue to power the strongest and healthiest real estate market we have seen in a decade."
Close to 550,000 new listings came onto the market in April, and that helped total inventory grow 2% over March, Smoke adds. "However, we know that sales are picking up faster than inventory since the median age of inventory fell again by six days after falling a whopping 22 days in March," he says. "As a result we have 4% fewer homes available for sale compared to last year and homes stay on the market five fewer days."
Regionally, the housing market is really taken flight in the U.S. West and Midwest, where key cities are seeing inventory move up to 45 days faster than the rest of the country. Those markets include a heavy dose of California areas, where San Francisco-Oakland, Vallejo-Fairfield and San Jose-Sunnyvale take up three of the top five "Hottest Markets Index," according to Realtor.com. Denver and Dallas-Forth Worth comprise the remaining two spots in that top five rankings.
What makes or breaks a regional real estate market? Primarily, big demand and weak inventory - two themes homebuyers and sellers should bring up right away with their real estate professional when looking for a deal.
"The Boulder, Colorado market is booming," says Bob Gordon a realtor at Remax/Berkshire Hathaway. "We are deeply seated in a sellers market, which means multiple offers, frequently for better than list price on a very tight inventory." Gordon says that there are always fundamental reasons for "red hot" regional real estate markets. "It's simply high demand and low inventory," he explains. "Super low interest rates are adding fuel to the fire. This is a popular area to relocate."
Following trends and brand name companies into a region is also a good path for buyers looking to get into a booming market. "Colorado is a leader in the pro-marijuana position, so we do get a lot of folks relocating for that," Gordon adds. "Like it or leave it, being able to legally get high is a big deal, and marijuana is not cheap, so those moving here for legal use often have high paying careers."
"Boulder also has a very high educated workforce," he adds. "So we are seeing companies like Twitter and Google establish offices in Boulder. This will bring more high paying jobs to the city and add to the pressure on the housing market."
Generally, any signs of regional population growth is a good indicator of a robust housing market, and that's probably a long-term trend.
"Here in Los Angeles, we are seeing growth in our market every year," offers Amber Dolle, a Realtor with John Aaroe Group in Sherman Oaks, Caif. "And since the housing market here is on the pricier side compared to some parts of the US, people are getting in line to own a piece of it. We only seeming to be growing in population every year and we don't have a ton of new developments, so it really boils down to supply versus demand."
Weather is usually a factor, too, so following the warm breezes and palm trees is another good idea for homebuyers looking to nest in a hot market. "Since we also have very mild winters and little rain, our home buying season gears up usually in February as oppose to the Spring like other areas, Dolle says. "I predict Southern California will hold strong this year in the market."
Back East, where the real estate living isn't as easy, high prices are driving buyers, especially property investors, out of the big urban areas. "There are a few reasons why you see the housing markets out West go up," notes Jesse Yoskowitz, CEO and founder of the Limitless Group, a luxury residential real estate brokerage in New York City. "The New York City market is so saturated that there isn't enough inventory for developers, builders and landlords to purchase, and the pricing in New York is so high that it doesn't make sense to purchase existing multi-family buildings or land to develop condos or rentals."
Even real estate developers are moving west where it is more affordable to buy and build. "Out West, you can get high end finishes and larger square footage homes for much, much cheaper than in New York," Yoskowitz adds. "You get so much more bang for your buck out west than in New York City, and big real estate players are creating more and affordable homes out West."
That can draw attention from folks looking to hang their hat on a nice piece of property.
"People see opportunity out West, which creates a hype, which attracts clients and, ultimately, home buyers"
These days, that activity is tilted West of the Mississippi River, and it looks to stay that way at last through 2016.