America’s housing shortage continues to spiral—with the number of homes for sale nationwide dropping 14.4% year-over-year in January, according to a report Thursday from Redfin.
It was the largest year-over-year decline since U.S. supply began falling every month 28 months ago. A competitive market for available homes has pushed prices up, with the median sales price hitting $280,500 in January, a 7.8% increase over last year.
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The typical home sold in just 53 days in January—six days faster than a year ago.
Some of the fastest moving markets in the country are in pricey coastal cities. San Jose, California—where homes average around $1 million—logged the fastest moving sales in the country in January, with the average home finding a buyer in 12 days, down 30 days from last year, according to the report.
The average home is selling for 9% over asking, according to the online brokerage.
"Buyers in San Jose have shown a complete disregard for recent comparable offers and are coming in swinging in order to win a home," said Redfin Silicon Valley agent Kalena Masching in the report.
"It has gotten to the point where buyers are submitting preemptive offers that are so good it’s not worth the seller to wait for an official offer deadline or the first open house," Ms. Masching said.
Oakland, California, and Seattle, are also seeing rapid sales—with the typical home listed for 17 and 16 days, respectively.
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An overhaul of the U.S. tax law at the end of 2017 and fears over rising interest rates are affecting the housing market as people sort out how the changes will affect them, particularly in high-tax states, such as New York or California.
"Potential move-up buyers are now reassessing whether it makes sense to list their homes in the face of higher mortgage rates and less favorable tax treatment for their next home," said Redfin senior economist Taylor Marr. "Some buyers have determined lower deductions may be offset by other tax cuts, but those tax cuts won’t hit buyers’ paychecks for a couple months," he said.
In a Redfin survey, 21% of respondents said they would look for a less expensive home in the face of rising interest rates, and 6% said they would stop their search if mortgage rates rise about 5%.