With our extensive database of home sales and listings, we’ve long wanted to provide comprehensive and detailed data on the number of days it takes to sell a home. Well, that day has finally come. Not only have we computed this metric for all of our markets, but we also track its value over time from the beginning of 2010 in order to surface the seasonal nature of the housing market and reveal just how quickly homes are selling these days relative to the not-so-distant past.
The hot metros in the West have the shortest days on market. In San Francisco, it only takes 48 days to go from listing a home to signing papers. In San Jose, days on market is even quicker at only 43 days. This is in sharp contrast to some metros further East like New York (151 days), Fayetteville, NC (174 days), and Jacksonville, FL (174 days).
From a simple snapshot of current days on market, it’s hard to draw conclusions over what drives these differences. For example, days on market varies across the country due to regulation and procedural differences, not just because of market conditions. This is where year-over-year changes or time series data for days on market is incredibly helpful.
For example, during 2011, the median days on market significantly increased in Fayetteville, and is currently 16 percent (24 days) longer this September than last. Jacksonville’s days on market dropped precipitously in from January 2010 through December 2010, only to increase dramatically so far in 2013 (20 percent year-over-year for homes sold in September 2013).
While it may still take a while to sign papers in New York, days on market of homes sold in September is actually 11 percent shorter (19 days) than last year. This decrease in time on market is modest compared to the rapid changes in California metros. Days on market was practically cut in half in Napa, CA where homes sold in September took only 57 days to sell, which is down from 110 days compared to last year and 181 days in December 2010. Modesto and Stockton have also seen dramatic changes (down 47 percent and 45 percent year-over-year, respectively).
What can explain all this moving and shaking? Since 2012, many metros have seen strong rebounds in housing demand as investors and home shoppers are finding great potential in fallen home prices. But underwater homeowners, who can’t always afford to sell so low, put off selling their homes until prices make more financial sense. This has constrained inventory in the same places where people are ready to buy. Put it all together and you’ve got metro areas where some homes are flying off the market almost as soon as they’re listed.
The graph below demonstrates these relationships. The cloud of dots is downward sloping: the metros with the largest price spikes, as seen by large year-over-year changes in the Zillow Home Value Index (ZHVI), are also the areas where homes are selling the fastest. Greater reductions in time on market (red dots) correspond to larger increases in home values over the past year, whereas blue dots are mostly in the lower right of the graph with smaller home value growth and longer time on market.
We begin by first matching the sale of a property to its listings on Zillow. It is not uncommon for a property to be listed and reposted in a short period of time. Sometimes the homeowner has decided to change their broker or agent. Sometimes the listing appears to have been removed strategically after several price drops and relisted a month later to hit a new set of home shoppers. Regardless, we consider the new listing to be a part of the same attempt to sell the home if the listing was removed and reposted within 40 days.
We estimate the median days on market of homes sold in a given month within states, metros, and counties. To ensure confidence in our data, we only report the smoothed time series for regions with more than 50 observations per month for more than 80 percent of the total time span since Jan. 1, 2010. Months with fewer than 20 observations are ignored entirely. For a single time on market observation we must have a date on an official transaction record and a listing record on Zillow for that same address. In areas where there is greater latency in the reporting of home sales, it is less likely we can provide a median days on market in the most recent month. We smooth the series with a simple three-month symmetrical moving average, which weights the center observation twice as heavily as the days on market observed in the adjacent months.