“All real estate is local,” the old saying goes, even though housing markets across the country have moved relatively in tandem over the past several years. Now, however, things are shifting, and that’s a good thing for anyone in the market to purchase a home.
Nearly two-thirds of the nation’s largest housing markets are either evenly balanced between buyers and sellers or considered to be buyer’s markets outright, according to a report out April 9.
The traditional real estate industry rule of thumb has been that a seller’s market is one with less than 4 months of supply of homes to buy, while a buyer’s market is 6 months or greater. Balanced markets fall somewhere in between.
But the new report, from Realtor.com, incorporates several additional factors to decide how to label a particular metro area market. In addition to inventory, it looks at market pace and competition, and pricing pressure and adjustments.
Markets aren’t only categorized simply as a “seller’s market” or a “buyer’s market,” but assigned a time element as well. An “early seller’s” market, for example, means that conditions mostly favor those in the market to sell, but are not yet at the peak of favorable conditions for those people. A “late seller’s market,” for example, might mean the area has run its course for those looking to sell, and may be ready to flip back to favoring buyers.
Right now, all of the buyer’s markets sit in what the framework calls ‘Early Buyer’ conditions: inventory is growing, price cuts are common, and buyers are starting to hold the upper hand. Importantly, it also suggests their negotiating leverage is likely to get even stronger in the coming months.
Strikingly, most of the metros in this category are those that boomed during the pandemic, including several Florida and Texas hot spots, and Atlanta.
Stephen Freudenberg, a real estate agent in Atlanta, agrees that some parts of the metro area, especially those that are a bit farther from the city center, are “definitely slowing down and feel like they’re already in buyers market territory.”
But in desirable areas with top-ranked schools, Freudenberg’s buyers continue to face familiar struggles.
“The hot zones are hot,” he said. “Inventory is tight, the nice listings that are priced within reason and don’t have obvious deficiencies are still getting multiple offers.”
For that reason, Freudenberg believes that not only is all real estate local, it’s in fact hyper-local.
All Real Estate Is Cyclical
Realtor.com economists say real estate’s economic cycle is an important part of the housing market.
“Two metros could appear perfectly balanced,” said Jake Krimmel, senior economist with Realtor.com, in an email exchange with USA TODAY. But one may be in the midst of loosening, and turning more buyer-friendly, while the other is tightening, or shifting toward sellers.
In general, Krimmel explained, a housing market tightens, reaches peak seller conditions, cools back toward balance, becomes more buyer-friendly, and eventually recovers again as conditions improve. He thinks of that as a clockwise rotation.
But that’s not always the case. Big outside shocks — think of the COVID-19 pandemic, for example, or the interest-rate hikes of 2022 — can cause markets to stall, skip phases, or move in counterintuitive ways, he explained.
Right now, for example, the Washington DC area, Las Vegas, and Phoenix are categorized as “late balanced.” The next phase would be “early buyer.” The data may suggest that those metros are heading in that direction, Krimmel said, but that’s not inevitable — and the timing for any such transition is also a big question.
In summary, the Realtor.com tool may be used to investigate the conditions in any particular area — but not to time the market. It’s also worth noting that after years of under-building across the country, sellers mostly still have the upper hand.
“It’s all the same old story,” Freudenberg told USA TODAY. “Supply and demand are the metrics that matter. In areas where supply of desirable homes is constrained and demand is high, it’s still really tough to be a buyer.”
The full list can be found below, and a deeper explanation of the report can be found on Realtor’s website.
U.S. Housing Markets at a Glance
Metro AreaMarket Status
Grand Rapids-Wyoming, Mich.Early seller
Kansas City, Mo.-Kan.Early seller
Milwaukee-Waukesha-West Allis, Wis.Early seller
St. Louis, Mo.-Ill.Early seller
Providence-Warwick, R.I.-Mass.Early seller
San Francisco-Oakland-Hayward, Calif.Early seller
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.Peak seller
Indianapolis-Carmel-Anderson, Ind.Peak seller
Hartford-West Hartford-East Hartford, Conn.Peak seller
Virginia Beach-Norfolk-Newport News, Va.-N.C.Peak seller
Columbus, OhioLate seller
BostonLate seller
San JoseLate seller
Dallas-Fort Worth-Arlington, TexasEarly balanced
Louisville/Jefferson County, Ky.-Ind.Early balanced
Denver-Aurora-Lakewood, Colo.Early balanced
Los Angeles-Long Beach-Anaheim, Calif.Early balanced
Sacramento-Roseville-Arden-Arcade, Calif.Early balanced
San Diego-Carlsbad, Calif.Early balanced
Tucson, Ariz.Early balanced
Cincinnati, Ohio-Ky.-Ind.Balanced — cooling
Cleveland-Elyria, OhioBalanced — cooling
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.Balanced — cooling
Birmingham-Hoover, Ala.Balanced — cooling
Houston-The Woodlands-Sugar Land, TexasBalanced — cooling
Memphis, Tenn.-Miss.-Ark.Balanced — cooling
Richmond, Va.Balanced — cooling
San Antonio-New Braunfels, TexasBalanced — cooling
Detroit-Warren-Dearborn, Mich.Late balanced
Baltimore-Columbia-Towson, Md.Late balanced
Charlotte-Concord-Gastonia, N.C.-S.C.Late balanced
Oklahoma City, Okla.Late balanced
Raleigh, N.C.Late balanced
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W. Va.Late balanced
Las Vegas-Henderson-Paradise, Nev.Late balanced
Phoenix-Mesa-Scottsdale, Ariz.Late balanced
Atlanta-Sandy Springs-Roswell, Ga.Early buyer
Austin-Round Rock, TexasEarly buyer
Jacksonville, Fla.Early buyer
Miami-Fort Lauderdale-West Palm Beach, Fla.Early buyer
Nashville-Davidson–Murfreesboro–Franklin, Tenn.Early buyer
Orlando-Kissimmee-Sanford, Fla.Early buyer
Tampa-St. Petersburg-Clearwater, Fla.Early buyer
Riverside-San Bernardino-Ontario, Calif.Early buyer
Minneapolis-St. Paul-Bloomington, Minn.-Wis.Balanced — warming
New York-Newark-Jersey City, N.Y.-N.J.-Pa.Balanced — warming
Buffalo-Cheektowaga-Niagara Falls, N.Y.Late balanced
Pittsburgh, Pa.Late balanced
Portland-Vancouver-Hillsboro, Ore.-Wash.Late balanced
Seattle-Tacoma-Bellevue, Wash.Late balanced
Reporting by Andrea Riquier, USA TODAY. Distributed via USA TODAY Network/Reuters Connect.
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