SANTA CLARA, Calif.,
June 4, 2019 /PRNewswire/ -- Market
conditions are tipping toward buyers for the first time in years in
cities throughout the U.S. The shift is prompted by a wave of new
for-sale listings and slowing home sales, according to new research
released today by realtor.com®, the Home of Home
Search℠.
The top 10 markets for home buyers include Albany, N.Y.; Chicago; San
Antonio; Jacksonville,
Fla., Riverside, Calif.;
Los Angeles; Providence, R.I.; Dallas; Nashville,
Tenn.; and Tampa, Fla.
"The U.S. housing market has largely favored sellers over the
last several years as a result of the record-breaking low inventory
and red-hot demand that led to intense competition and fast-rising
home prices. However, we're now seeing some metros buck this
trend," according to Danielle Hale,
realtor.com®'s chief economist. "Slowing sales and
growing inventories have caused months supply to increase in many
markets across the country. These buyer-friendly markets are areas
where inventory already outpaces sales relative to other large
markets and they are continuing to move in a buyer-friendly
direction, but they're not the only areas trending this
way."
To determine the top markets for buyers, realtor.com®
focused its analysis on markets where the pace of sales relative to
inventory is below the national average and slowing, inventory of
available homes for sale is growing, and sales prices are growing
slower than the national average or declining.
Slow Sales Pace Replenishes Housing Inventory
Months
supply data, which examines how long inventory would last under the
current amount of demand if no more inventory were added, has
increased to 5.2 months in these 10 metros, up from 4.5 months this
time last year. This means, it would take 5.2 months to completely
run out of available homes for sale. In fact, all 10 markets have
more than four months of supply and an absorption rate under 25
percent, which translates into less than one home sale per month,
for every five homes listed. Meanwhile, months supply in these
markets is one month greater than in the top 50 largest U.S.
markets, indicating 24 percent more inventory relative to sales in
these areas.
Hale added, "These 10 housing markets are already more
buyer-friendly when looking at the availability of homes for sale
in different markets, however, the mismatch between what's
available and what buyers want has led to lukewarm demand and
lackluster sales. As inventory continues to grow in these markets,
buyers will see more options, and should ultimately gain more
bargaining power."
Inventory Growth Breaks Double Digits
As demand
cools in these top markets for buyers, inventory continues to ramp
up. On average, the top markets for buyers are seeing active
inventory grow at a rapid 14.6 percent pace, year-over-year,
compared to the national growth rate of just 4.0 percent. This
paints a completely different picture from the supply constrained
conditions that haunted buyers in many areas for so long.
Los Angeles, Dallas, and Nashville, which were previously some of the
most constrained among these buyer friendly markets, have seen the
greatest inventory growth, as each of these markets have increased
its active inventory by over 24 percent, year-over-year.
Home Price Growth Hits a Wall
In reaction to
the increased inventory and lessened demand, sales price growth has
hit a wall in these markets, and one is even seeing home prices
decline. On average, sales prices in the 10 markets have grown a
miniscule 1.4 percent. This is down dramatically from the 8.4
percent sales price growth seen this time last year, and 6.3
percent growth in 2017. Not coincidentally, lessened demand and
pricier inventory have led to an impact on sales, which have
declined 5.5 percent on average, year-over-year. In Tampa, home prices have declined
year-over-year for the first time since 2012.
Housing Market Game Changers
In Chicago, Los Angeles, and Providence, the housing market slowdown can be
traced to economic growth that's fallen behind the rest of the
country and pushed potential buyers to seek career options
elsewhere. In these three markets, both household and job creation
are lagging behind the U.S. average.
A similar pattern is occurring in Riverside, Tampa, and Jacksonville, where job growth has notably
lagged the U.S. average. In Tampa
and Jacksonville, the tax reform
boosted out-of state buyer activity last year, but the boost has
faded as prices rise and perceived value decreases.
In Nashville, Dallas and San
Antonio, the relative slowdown can be attributed to the
overheating these markets have witnessed. Over the last three years
in particular, home price growth in these Southern markets has
reached unsustainable levels, exhausting buyers' budgets and
causing the pace of sales to slow dramatically. Since the end of
2015, home prices in the three markets combined have grown notably
faster than the U.S. average, up 21 percent, compared to 13 percent
nationally during the three year period, respectively. Mid- to
low-tier priced homes in particular remain difficult to find, as
the median household in these areas are only able to afford just 26
percent, 20 percent, and 21 percent of the available inventory,
compared with 36 percent of available inventory being affordable to
the median-income household nationwide per the April Realtors(R)
Affordability Distribution Curve data.
For more information, please visit:
https://www.realtor.com/research/ten-housing-markets-enter-buyer-friendly-territory/
Top Markets for Home Buyers
Rank
|
Metro
|
Months of
Supply
|
Months
Supply
Y/Y
|
Active
Listing
Count
Y/Y
|
Median
Sales
Price Y/Y
|
1
|
Albany-Schenectady-Troy, N.Y.
|
6.4 MO.
|
31%
|
11%
|
0%
|
2
|
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.
|
5.9 MO.
|
1%
|
5%
|
0%
|
3
|
San Antonio-New
Braunfels, Texas
|
5.7 MO.
|
5%
|
13%
|
3%
|
4
|
Jacksonville,
Fla.
|
5.6 MO.
|
3%
|
13%
|
4%
|
5
|
Riverside-San
Bernardino-Ontario, Calif.
|
5.2 MO.
|
15%
|
7%
|
2%
|
6
|
Los Angeles-Long
Beach-Anaheim, Calif.
|
5.1 MO.
|
34%
|
23%
|
1%
|
7
|
Providence-Warwick,
R.I.-Mass.
|
5.0 MO.
|
7%
|
12%
|
3%
|
8
|
Dallas-Fort
Worth-Arlington, Texas
|
4.9 MO.
|
28%
|
23%
|
0%
|
9
|
Nashville-Davidson--Murfreesboro--Franklin,
Tenn.
|
4.4 MO.
|
35%
|
25%
|
2%
|
10
|
Tampa-St.
Petersburg-Clearwater, Fla.
|
4.1 MO.
|
9%
|
14%
|
-1%
|
About realtor.com®
Realtor.com®, The Home
of Home Search℠, offers the most MLS-listed for-sale listings among
national real estate portals, and access to information, tools and
professional expertise that help people move confidently through
every step of their home journey. Through its Opcity platform,
realtor.com® uses data science and machine learning to
connect consumers with a real estate professional based on their
specific buying and selling needs. Realtor.com®pioneered
the world of digital real estate 20 years ago, and today is a
trusted resource for home buyers, sellers and dreamers by making
all things home simple, efficient and enjoyable.
Realtor.com® is operated by News Corp [Nasdaq: NWS,
NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual
license from the National Association of REALTORS®. For
more information, visit realtor.com®.
Contact: Cody Horvat
-- cody.horvat@move.com
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SOURCE realtor.com