ZipRealty CEO Lanny Baker credits the "limited inventory of homes on the market" as well as low mortgage rates, which make it cheaper for buyers to borrow enough to pay close to the seller's asking price. Inventories are low because millions of "underwater" homeowners can't sell because their homes are not worth enough for the proceeds to pay off the mortgage.
“In addition, the median days a home spent on the market dropped to 44 nationwide in 2012, a 23 percent decline from 2011’s 57 days,” ZipRealty said.
In some markets, one in five homes sell within seven days of being listed, and it is becoming increasingly common for sellers to get multiple offers.
According to ZipRealty, the narrowest list-to-closing price gaps are in San Francisco; San Diego; Sacramento, Calif.; Las Vegas; Los Angeles; Orange County, Calif.; Denver; Tucson, Ariz.; Portland, Ore.; and Seattle.
Western cities also dominate the list of markets with the biggest drop in time from listing to offer. In Phoenix, for instance, the median home spent 42 days on the market in 2011 and just 25 days in 2012. “Homes in Sacramento, San Francisco, Austin, Dallas/Fort Worth, Portland, Washington, D.C., and Orlando rounded out the list of metros with the greatest decreases in days on market,” the firm said.
Of course, a broad trend doesn’t necessarily apply to an individual home, and sellers and buyers should be wary of misusing the data.
It makes no sense, for instance, for a seller to hold firm on an asking price if that price is unrealistic. Nor should buyers assume they must pay close to the asking price.
Instead, each party should study recent sales in the area closely for the best possible assessment of the home's current value. If possible, that means relying only on sales of comparable homes from the past few months, though there may not be many examples.
Buyer and seller should also question their real estate agents closely, and take advice with a grain of salt. An agent, for instance, might encourage the seller to ask a bit less because the agent would rather earn a slightly smaller commission if the home will sell with fewer showings. The buyer might be urged to offer close to the full asking price for the same reason — to close the deal sooner so the agent can work on other properties.
Recommended by For the past 20 of his nearly 40 years in journalism, Jeff Brown has written about personal finance, economics and the financial markets. He has been a staff writer at The Philadelphia Inquirer and other papers, and in his six-year freelance career has been a columnist for TheStreet.com and the Nightly Business Report on PBS and blogged for The New York Times, MSNBC.com and other Internet sites.