Anybody looking for a place to call home knows that there are not many places to purchase. The total supply is at an all-time low, as are new listings. This means the current inventory is in high demand and is being sold quickly. It’s really fast. 

A January report from Realtor.com found that the average property remained on the market for 61 days. Realtor.com’s January reading from 2016 shows that this pace is the fastest since the company began to track the data in 2016. This pace is 10 days faster than that recorded in January 2021, and 29 less than the 2017-20 pace.

Homes sold even faster in several metropolitan markets. Nashville’s average time to sell a home was only 29 days. In Denver, 35 days. It took 38 days to complete Las Vegas, and 39 days for Seattle.

The South suffered the largest annual decline in days taken to sell homes. Markets like Minneapolis, Richmond, Washington, D.C., had their homes on the market for a little longer.

These days run from the time of listing until the close date. Because of the lack of workers in the market closings can be slow. Anecdotally it is not uncommon to hear that houses go under contract within a week of multiple offers.

January is typically one of the slower months on the housing market. This year, however, there seems to be unusually strong competition. President’s Day Weekend is the usual start to spring markets. Potential buyers may have been scared by rising mortgage rates in the last month, and stepped up their search to find them before they are priced out.

Markets are suffering from a super-lean supply. The rising cost of land and building materials as well as the severe shortage in labor force are still hindering builders. The sellers simply aren’t responding. The number of new listings for January was down by 9% from the previous year. Inventory was 28% lower.

Danielle Hale is chief economist for Realtor.com. “Factors, such as Omicron uncertainties, could be making sellers hesitate even though housing conditions are very favorable,” she said. Another barrier to sellers buying is the inventory “chicken-and egg” dilemma. Home buyers are looking for options. Should they wait for inventory to come on the market or list as soon as possible?

Some potential sellers are being discouraged from selling because of rising mortgage rates. A majority of mortgage holders have rates below 3%. Now, the average 30-year fixed rate mortgage is 4%. The idea of having to pay more for the same amount as they currently owe may be a disconcerting thought among current homeowners.

Rates rise and so does purchasing power. Prices for homes continue to rise rapidly, although they have been increasing steadily. As sales drop, it is expected that prices will fall. The short supply means that homes are selling more quickly than ever, and therefore, there is less demand. To ensure they are able to deliver their homes on time, builders slow down the sales of their own houses.

Sheryl Palmer, chief executive officer of Homebuilder wrote that demand continues to exceed supply. Sheryl continued to maintain our disciplined strategy of selling by maintaining sales management in large majority of our communities. This allowed us to match our production and sales cadences and maximize community performance. Taylor MorrisonIn its most recent earnings release.