Boomers and Engineers a Good Sign for Housing Markets

By: Realtor.com Team 

 

Metropolitan areas that are home to larger populations of math and science professionals and baby boomers are bucking the usual seasonal trend of a real estate slowdown as summer ends, realtor.com® research shows.

Properties in 12 major metro areas are spending less than two months on the market, according to the realtor.com® September National Housing Trend Report, released today.
The 12 markets include the greater Seattle, San Francisco, Austin, TX, and Washington, D.C. areas.
“When we see homes moving quickly in a particular market, we expect the trend to be supported by signs of local health like growth in industrial production and employment,” said Jonathan Smoke, chief economist for realtor.com®.

The high proportion of math and science professionals in these fast-moving housing markets likely has to do with the higher incomes found in those professions, which also attracts job seekers from other areas, Smoke added.

“So, assuming the portion of people moving in have above-average jobs, you have a recipe for strong demand up against tight supply,” he said.

As for the baby boomers, Smoke pointed out this is a huge generation and the one with the most wealth. Many of them are approaching or will soon be thinking about retirement, a major life event that spurs housing transactions—whether they’re downsizing because the kids are gone, upsizing to their dream home or selling to move to senior living communities.

All of those decisions support local construction and economic activity, providing a strong base for housing demand, Smoke said.



“As the technology industry grows and aging baby boomers decide to make housing moves to support their retirement, we’ll continue to see strong housing demand associated with these factors.”
On a national level, median age of inventory is lower than last year, with a reduced number of homes on the market. In September, homes spent approximately 90 days on the market, which is three days less compared to this time last year.

Median listing prices held steady for the fourth consecutive month, maintaining a 7.7% gain year-over-year. According to the National Association of REALTORS®, inventory continued to demonstrate persistently low months’ supply at five and a half months as compared with normal levels of six to seven months.

New homes months’ supply was even lower at nearly five months in August.
“To truly relieve the inventory shortage on a sustained basis, new home construction needs to rise by at least 50% from the current levels,” said Lawrence Yun, chief economist and senior vice president of research for the National Association of REALTORS®.