Homes going off the market at a record pace

Given the reduced supply of homes for sale, Redfin reports that houses for sale are going fast:

New research suggests that not only are typical selling times declining in the current bull market for housing, but they also may have hit record lows. According to realty brokerage Redfin, the median time on market dipped to just 26 days during June — the shortest time on record for its database — with houses in some markets moving from listing to contract in 11 days or less. Denver homes sold in six days or less, according to Redfin; Seattle’s median was nine days; Portland, Ore., 10 days; and Boston, 11 days.

That’s hot. But there are dozens of cities around the country where selling speeds are nowhere near that quick. According to June data from real estate Web portal, which uses information from local multiple-listing services nationwide, the median time on market for homes in Chicago was 54 days. In the Washington, D.C., area it was 45 days; Miami, 75 days; metropolitan New York, 68 days; Oklahoma City, 53 days. At the laggard end of the spectrum, the median house in Brownsville, Texas, took 122 days to sell; Myrtle Beach, S.C., 105 days.

Why such apparently wide variations from area to area, and what can a typical seller expect? Some basics: Part of selling speed depends on matters that you can control. But there are factors you can’t control — the strength of your local economy, employment and income growth. If the economy is on fire and there’s a low inventory of homes for sale to serve market demand, you’re going to see houses rapidly zipping from listing to contract.

Regional variation is to be expected but it may also suggest that certain housing markets are getting overheated again – not necessarily by high prices and a lot of new construction (like the mid 2000s sprawl of Las Vegas) but by having high demand yet few homes for sale.

The article goes on to talk about how sellers can slow down the process by pricing their homes a bit higher and leaving room for negotiation. But, there is little discussion about who benefits or is hurt by these quick sales times. Doesn’t this suggest that more housing is needed in the market, particularly in the lower ends of the market, either through some new construction or through continuing to help people get out from underneath their mortgages?

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