The back half of the summer brings several defining moments each year: an almost imperceptible shortening of days, a desperate run on the last bottles of drugstore suntan lotion, and—in most years— a slowdown in the torrid pace of the peak home-buying season. But wait: What happened to that real estate slowdown, anyhow? Things are cooking along as if the hot season is just starting.
"We normally see the housing market begin to slow down in midsummer, but this year has been a different story," says Javier Vivas, realtor.com®'s manager of economic research. "Homes are not only selling faster than last July, but also faster than last year’s peak months."
The good news is that more homes hit the market in July for the third month in a row, according to a preliminary analysis of this month's data by realtor.com. However, many of those 510,000 residences came with some pretty steep price tags, making it hard for first-time buyers to enter the fray. Those higher costs helped to bring the median home price up to $275,000 nationally.
Homes are now staying on the market for about 64 days. That's four days more than last month, giving buyers a little more breathing room. But it's a few days less than the same time last summer.
Furthermore, "home prices are also failing to show hints of the usual seasonal cool down and remain at stubborn highs," Vivas says. "Mid- to lower-tier homes are flying off the shelves and ... [are] being replaced by higher-priced, larger homes."
Some cities made the nation's hottest real estate markets list due to affordable prices. (The median home price in Detroit is just $35,000!) Others are simply places everyone seems to want to be. And some markets are appealing due to their proximity to pricier cities.
The tech explosion (drawing well-paid workers from all over the world competing for a limited supply of homes) and sky-high San Francisco Bay Area prices have led to Vallejo, CA, topping the hottest markets list—again. The Bay Area city was once better known for its abandoned shipyard, high crime rates, and 2008 bankruptcy than its real estate. But these days, the median home price is $385,000, according to realtor.com. And that's cheap compared with its neighbors.
San Francisco is only about a 40-minute drive away—and yet its median home prices are $1,300,000. That's nearly 237.7% more than Vallejo's.
"There's nothing really special about Vallejo that's bringing people here other than the pricing," says Realtor® Tim Garton of Re/Max Gold in Vallejo. "Our prices got so low compared to the rest of the Bay Area during the downturn. Now we’re coming back because ... we're a very affordable alternative."