The housing market is now shifting towards buyers, but Americans are still treading lightly due to high costs of living.
CNN reports that nationally, there are still more sellers than buyers in the housing market despite the shifting trend.
According to Redfin, sellers outnumbered buyers by 58% in August, the biggest gap in their records, driven by a surge in listings and stagnant demand.
Which states has the most sellers?
Nashville, Miami and Houston are the strongest buyer’s markets, with more than double the number of sellers as buyers.
In Nashville, TN, Redfin reports there were roughly 139% more home sellers than buyers in the market in August.
It represents the biggest gap in records since 2013, making Nashville the strongest buyer’s market in the United States.
Miami comes close with 138% more sellers than buyers. Houston came up at 131%.
More Sellers Equals Room for Buyers to Negotiate
When there’s a surplus of sellers and they outnumber buyers significantly, home buyers tend to have more negotiating leverage due to an array of options.
When the house around the corner is also for sale, buyers may have a better chance at closing a deal tens of thousands of dollars less of market value.
That’s why a market with a lot more sellers than buyers is considered a buyer’s market.
Redfin defines a market where there are over 10% more sellers than buyers as a buyer’s market and a market where there are over 10% fewer sellers than buyers as a seller’s market.
A market where the gap is plus or minus 10% is considered a ‘balanced market’.
Source: Redfin data, MLS data, Created with Datawrapper.
But there’s a catch.
It’s only a buyer’s market for people who can afford to buy homes.
House prices are still high nationwide and widespread economic uncertainty looms across many industries.
Home sales for July fell 4.1% during a time where competition is slowing the housing market in places such as Texas and job insecurity begins to weaken demand nationwide.
The median increase in home prices and mortgage rates is causing homes sales to fall.
“The housing market suffered from a mid-summer slump in July as would-be buyers grappled with record-high home prices, increasing mortgage rates, and growing financial insecurity,” said Chen Zhao, Redfin’s head of economics research.
“Many Americans simply can’t afford today’s housing costs, while others are holding off because they’re worried about the economy and/or their job security,” Zhao continued.
“The silver lining is that the buyers who can afford a home may be able to negotiate on price and get concessions from sellers who are eager to offload their house.”
Housing Market – The Housing Market Is Now Shifting Towards Buyers.
For those who are ready, qualified, and have stacked enough capital for a down payment, today’s housing market is a buy despite the current landscape.
“With sellers piling into the market and demand falling flat, today’s house hunters can afford to be choosy,” said Asad Khan, a senior economist at Redfin.
“Even during a time when housing costs are elevated, the surplus of sellers over buyers makes it a good time to be a house hunter, in some respects. In most markets, buyers should negotiate on price and ask for concessions like repairs or help with closing costs.
Buyers shouldn’t assume every seller will budge, especially on a desirable home that’s already priced well, but they don’t need to rush into a deal that doesn’t feel right.
For sellers, the message is almost the opposite: Work harder to stand out. Take stock of how other homes are priced, make sure your home is prepped and be prepared to negotiate. With so many competing listings, sellers who want to find a buyer quickly should price competitively from the start.”
