Denver, Colorado; Seattle, Washington and Portland, Oregon made the list as the top real estate markets of 2016, according to Redfin.
This latest report measured the housing markets’ hotness based on the percentage of listings designated as Hot Homes, homes likely to go under contract within 14 days using the company’s proprietary Hot Homes algorithm.
Over 60% of listings in Denver, Seattle and Portland are considered Hot Homes, surpassing all other markets Redfin tracks.
The low supply of listings in these markets has created a strong demand, therefore decreasing the number of day on the market. In fact, compared to April of 2012 in Denver, homes typically sold in 36 days. In Portland they sold in 65 days and 50 days in Seattle. This year, those numbers have dropped to an average 10 days in Denver and eight days in Seattle and Portland.
It is not unusual for a home in Denver to have over 100 showings in just one weekend, and receiving up to 30 offers, Redfin agent Karla Kirkpatrick Adams said.
“The market is moving so quickly that I can no longer use recent sales as a guide for what my clients should offer on a home,” Kirkpatrick Adams said. “Instead, I call listing agents of similar homes that are under contract but haven’t yet sold.”
“I ask them the contract price, which is a more up-to-date reflection of the current market than the prices of homes that have already sold,” Kirkpatrick Adams said. “That way, I can advise my clients accurately.”
Although home prices are increasing faster than national rates in all three markets, Portland and Denver remain relatively affordable compared to other hot markets.
“Strong job growth and relatively affordable home prices have been lightning rods of buyer demand for Denver and Portland,” Redfin Chief Economist Nela Richardson said. “Their economies have a lot in common with the tech enclaves to the west, Seattle and San Francisco, but there’s a big difference: home prices.”
Compared to San Francisco, typical homes in Denver and Portland can cost about $850,000 less. In Seattle, homes sell for about $90,000 more than in Denver and Portland.
“The combination of jobs, affordability and a desirable western lifestyle is a triumvirate that buyers are flocking to this year,” Richardson said.
The upside to rising home prices? In the first quarter of 2016, 268,000 homeowners regained equity, pushing the total number of mortgaged residential properties with equity to 92%, according to new data from CoreLogic, a property information, analytics and data-enabled services provider.