Look East, Look West: All over the Map, U.S. Metros Showing Signs of Real Estate Progress

Welcome to ZipRealty’s new blog. We’re excited to begin sharing all of the industry knowledge that we’ve been collecting since we opened our doors back in 1999 – from key market data to helpful “how to” articles – in a public, easily accessible format. This blog is a way of connecting to the real estate community: that means you, whether you’re a home buyer, a home seller, an industry professional, or just someone interested in American real estate as it recovers and transforms in response to these turbulent—but also exciting—times.

Each week we’ll bring you unique and valuable insider data that you can only get from ZipRealty, data that comes as much from our research team as it does from our agents themselves: REALTORs® who are out in the field and who are on the pulse of their local markets.

We welcome your comments, story requests/ideas and emails. In the meantime, we’ll get the ball rolling with our flagship post.

Look East, Look West: All over the Map, U.S. Metros Showing Signs of Real Estate Progress

Plenty of doom and gloom greets us when we read the papers these days, especially the real estate pages. But a closer look, an analytical, data-backed study, shows that nationally, several metropolitan areas are picking up. By “picking up,” we mean specifically that the pending sales and closed sales transaction figures are both creeping upwards, and have been doing so steadily for the past two to four months.

Our Data

Our data team is amazing. Seriously. They are passionate (some might say obsessive) about collecting the most accurate, up-to-date data for all of the 25 major metros we serve. Because these metros span the nation – from the West Coast to the East Coast and all points between – we’re able to offer fresh, timely information about the country as a whole, as well as the specific cities and neighborhoods within those metros.

Below you will see the pending and sold figures for three U.S. metros: San Francisco, Phoenix, and Boston. Note than in each case, we are analyzing the metro, not the city. In most cases, a metro will include at least three if not more individual cities that make up a metro, so figures are culled from each city, so one city within a metro may have higher or lower figures than the metro as a whole. We will follow up with more on the performance of each city, but for this blog, we wanted to look at U.S. metros because they are larger and include more data overall; thus their progress more telling when we try to assess the health of the market.

1.  San Francisco Pending Homes for Sale and Sold Homes

 See all available homes for sale in the San Francisco Bay Area

 

2.  Phoenix Pending Homes for Sale and Sold Homes

See all available homes for sale in the Phoenix Area

 

3.  Boston Pending Homes for Sale and Sold Homes

 See all available homes for sale in the Boston area

As the charts demonstrate, the number of pending and sold homes has been steadily climbing for some time now, a sign of two things: more buyers are making offers and purchasing homes right now (which is typical for summer months), but more significantly homes sales are above, or nearly equal to home sales last summer, when the market was inflated by the government tax credit.

If this trend continues, home prices are likely going to start rising again – potentially great news for the industry as a whole, though perhaps not for buyers wanting low prices.

Typically, as pending transactions and home sales increase, the number of homes for sale (also known as inventory) consequently drops, leaving fewer homes on the market – and we all know that when there is less of something it tends to sell for more. On the flip side, when there are a lot of homes for sale, prices tend to lower.

Of course, interest rates are a variable in this analysis that we cannot predict. For example, if rates creep up slowly, they could push on-the-fence buyers to jump off on the side of buying; they may feel pressure to buy before interest rates rise further. On the other hand, higher interest rates may push people off the fence entirely: higher rates mean a higher mortgage, and some people may be understandably scared off by that. Interest rates can also affect home prices since sometimes higher rates force sellers to come down in asking price: this too is a variable in our analysis since such a phenomenon could cause sellers to hold off putting a home on the market, forcing inventory down, which again could have an inverse effect on prices. Or, the lower prices could attract more buyers… and thus more sellers.

In short, without a crystal ball, we can’t say with 100% certainty that these three markets will indeed continue to improve. What we can say, however, is that all three are on the rise. And in particular, with more and more transactions pending, we expect more and more closing – two factors vital in any real estate recovery.