Homes in these 10 ZIPs spend the least time on the market.
For sale signs haven't been lasting long in Redwood City, an affluent suburb of San Francisco populated with million-dollar homes, waterfront marinas and the corporate headquarters of tech companies like Oracle and Electronic Arts.
That's particularly true in 94065 ZIP code, where listed properties on average last only 40 days. Prices are down 15%, but homes are moving.
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Why? Even though the area's median home price is a relatively high $1.07 million, Redwood City is considered entry level among Silicon Valley's luxury neighborhoods; in neighboring Atherton and Burlingame, the median price is $4.1 million and $3.7 million, respectively. What's driving the price disparity? In this area of the country, higher-end sellers are less willing to drop their prices, while less affluent ones may want to cash in their chips and get out.
"People are saying if you don't have to sell, don't sell," says Heather Fernandez, vice president of marketing at Trulia.com, an online real estate marketplace. But in Redwood City, she says, "You've ended up with people in circumstances that they're more interested in moving that house and more willing to negotiate."
Blame, in part, incomes. Median earners in Redwood City take home $73,000 a year, according to the Census Bureau. The median age there is 35. In Atherton, just two miles away, the median age is 45, and median incomes fall above the $200,000 mark, at which the Census stops counting. That means that those living in Redwood City might be forced to sell low, while those in Atherton, in all likelihood, have larger nest eggs and are more able to wait out the market.
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Behind the Numbers
Our list of fastest luxury movers, which includes Woodmere, N.Y., (11538), Coral Gables, Fla., (33146), Palo Alto, Calif., (94303) and Great Neck, N.Y., (11021) in the top five spots, comes from the Forbes Luxury Housing Index, which tracks the 500 most expensive ZIP codes in the country using real estate statistics provided by Altos Research, a Mountain View, Calif.-based research firm. While the complete index currently averages 115 days on the market, the 10 fastest-selling ZIPs average only 66 days.
But before you start calling a housing market turnaround, it's important to understand why homes are selling quicker in these 10 areas. Another big reason--beyond price drops--is that non-motivated sellers are opting to pull their homes from the market, leaving only those sellers eager to negotiate for a deal and buyers with less inventory from which to choose.
"It has to do with a lot of the lower quality homes coming off the market," says Jonathan Miller, president of Miller Samuel, a Manhattan-based appraisal firm. "In a high-priced market like Great Neck, the lower days on market just shows the willingness of people to pull things off the market rather than take a price cut."
Transactions occur when realistic sellers stay in the marketplace. In places like the Rockridge neighborhood of Oakland (94618), which sits atop the hills and has views of the San Francisco and the Bay, sellers are moving properties for 15% to 20% price cuts, and doing so quickly. Homes there are selling in an average of 67 days.
For neighborhoods at median price points around $1 million, like Larchmont, N.Y., (10538), or Great Neck, N.Y., (11020), Miller says that sellers should expect to continue to negotiate downward this spring selling season, as further cuts would bring prices within range of new federal loan limits, a stimulus for sales.
Loans above $729,750 are considered jumbo and are available at a 6.5% 30-year fixed interest rate, according to HSH Associates, a Pompton Plains, N.J., research group. Conventional loans are currently being offered at a 5% average interest rate for 30 years, which would save buyers a substantial amount of money on their mortgage and, as a result, can tip the balance of a sale.
"With a 20% down payment, a $915,000 home fits within the $729,750 Federal Housing Administration loan limit," says Miller. "And the disparity between availability of conventional financing and jumbo financing will affect a lot of these markets."
America's Top-Selling Luxury Neighborhoods
Redwood City, Calif.
Median price: $1.07 million
Average days on market: 39
In the community of Redwood Shores, near the greenbelt and the lagoon, this four-bedroom, two-bathroom home was built in 1998 and has cherry floors, a chef's kitchen with granite counter tops and a family room complete with a fireplace and water views. It is listed for $1.08 million through Coldwell Banker.
Median price: $761,211
Average days on market: 51
Woodmere is in Long Island, about 10 minutes away from the beach fronts of Atlantic and Long Beach. Built in 1966, this five-bedroom, three-and-a-half-bathroom home is off Peninsula Boulevard, one of the city's main streets. It is listed for $749,000 through Century 21.
Coral Gables, Fla.
Median price: $897,169
Average days on market: 53
A Tuscan-style villa in Coral Gables, this 2,809-square-foot home has three bedrooms and two bathrooms, complete with 10-foot ceilings and arched doorways. Outside, there is a pool with a waterfall for those hot Florida summers. It is listed for $895,000 through Esslinger-Wooten-Maxwell Realtors.
Palo Alto, Calif.
Median price: $1.3 million
Average days on market: 61
This modern home was built in 1956 and has four bedrooms and two bathrooms, as well as 2,000 square feet of interior space. The floor-to-ceiling windows fill the home with natural sunlight, especially from the rear windows and backyard patio. It is listed for $1.29 million through Intero Real Estate Services.
Great Neck, N.Y.
Median price: $1.41 million
Average days on market: 66
This 2,779-square-foot, four-bedroom, three-and-a-half-bathroom Colonial sits on three acres of green space, including a spacious back yard and deck. There is a two-car garage that connects to the home through the kitchen and a fully furnished basement. It is listed for $1.54 million through Laffey Associates.
Click here to see the full list of America's Top-Selling Luxury Neighborhoods.