By Amy Hoak, MarketWatch
Here’s a sign of how tight inventory levels have been lately: More homes are selling in a flash—finding a buyer within 24 hours of being listed.
Sound unlikely?
Angela Catanzaro thought so, too, until her Broward County, Fla., home received a written offer one day after their listing hit the Internet. The home she and her husband decided to buy was also on the market for less than a day; they pounced on it after struggling to find quality properties that didn’t “need work.”
They plan to close on both transactions this month.
“We weren’t anticipating our home to sell so fast, so we asked if it was OK to stay until June so our daughter could finish school,” Catanzaro said. The Catanzaros didn’t even use a real-estate agent to market their house. They simply posted it on Zillow, a real-estate website.
Glenn Kelman, chief executive of Seattle-based real-estate brokerage Redfin, calls quick transactions like these “flash sales,” and said there have been more of them since the beginning of the year. That’s due to low inventory in the most competitive markets, including Miami, Washington, D.C., San Francisco and Los Angeles.
Redfin
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In some hot markets, homes are finding buyers within 24 hours of being listed.
San Jose, Calif., is also hot. It had less than one month’s worth of inventory in April, meaning that at the current pace of sales, it would take only a month to sell all the homes currently on the market. That made San Jose the tightest market of 22 analyzed by Redfin. There, 65% of homes were under contract in April within two weeks of being listed, while 20% were under contract after one week, according to Redfin data.
Over all 22 markets, the percentage of homes under contract within two weeks rose by 39% in April, compared with last year. Those under contract within one week rose by 54%.
Advances in technology, including mobile alerts for new listings, are also enabling these quick sales, Kelman said.
“People used to get the news about a new listing on Saturday morning and see it over the weekend,” he said. Now, websites including Redfin will send messages to mobile devices the moment a listing hits the market, and potential buyers can set up showings immediately, he added.
Granted, this kind of market speed isn’t everywhere. Few Midwestern towns and smaller markets, for example, will see many—if any—of these quick sales, said Michael Sklarz, president of Collateral Analytics, a company based in Honolulu that develops real-estate analytic tools for financial institutions.
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“It’s the extreme, though there is more of it right now than there has been in years,” said Jed Kolko, chief economist for Trulia, a real-estate website, referring to the flash sale phenomenon. “When buyers find something they want, they are moving quickly—sometimes offering more than asking because there’s little to choose from, especially in markets that have seen big price increases lately.”
Despite the quickness with which they need to move and the extra they might have to pay, many buyers are often still getting bargains on the homes they decide to purchase, Sklarz said.
“In a lot of markets, we still have prices significantly below prices in 2005 and 2006. Even though there is competition for existing homes, in many cases they’re still getting good deals,” Sklarz said.