More homebuyers are flocking to Denver, Portland and Seattle this year, motivated by the combined factors of job prospects and housing affordability, according to brokerage site Redfin.
In its latest report, the company identified the hottest housing markets by gauging the percentage of Hot Homes, which are defined as those likely to go under contract within 14 days.
By this measurement, those three cities topped the list. Hot Homes make up more than 60% of listings there.
A limited supply of homes for sale has led to strong demand from homebuyers in these markets, accelerating the pace at which homes sell, according to Redfin.
These markets are moving much faster compared with four years ago. Redfin data showed that a typical home in Denver found a buyer in 36 days in April 2012. This April that number dropped to 10 days. In Portland and Seattle, it took only eight days for a typical home to sell, it was 65 days and 50 days respectively in 2012.
A home in Denver can attract as many as 100 showings in a single weekend, according to Redfin agent Karla Kirkpatrick Adams. “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,” she said.
In all three metros, home prices are shooting up faster than the national pace, though 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,” said Nela Richardson, Chief Economist of Redfin. “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.”
The typical home in Denver and Portland costs an incredible $850,000 less than a home in San Francisco. Portland and Denver also offer a respite from Seattle, where homes typically sell for around $90,000 more than in those two cities.
However, unlike the general market, the high end market has seen sizable drop across the board, Richardson told Mansion Global.
"The high end segment is largely driven by buyers' need for global asset allocation," she said, "there is no indication they are refocusing geographically in the U.S."