It’s a good time to be house hunting in the South, as home buyers currently have the upper hand in many major areas—and could soon have more leverage in several more cities.
The U.S. housing market ticked further in favor of buyers in the third quarter, as about two-thirds of major metro areas currently favor buyers or are moving in that direction, according to a report released Monday by Realtor.com. Even though home buyers are gaining the negotiating advantage nationally and in many markets, they must also grapple with higher mortgage rates, noted Danielle Hale, chief economist at the Austin-based real estate site.
The 30-year mortgage rate, currently 7.4%, has been steadily climbing in recent weeks as it approaches the highest level in nearly three years. “Affordability is likely to continue as a top concern for shoppers, especially as mortgage rates above 7% limit how much home a fixed budget can buy,” Hale said in a statement.
Eight housing markets—Atlanta, Augusta, Charleston, Chattanooga, Denver, Jacksonville, Memphis and San Antonio—could soon tip into buyer’s-market territory, but even if buyers have more room to negotiate, that doesn’t necessarily translate to a more affordable purchase, added Jake Crimmel, a senior economist at Realtor.com.
“As rates rise, the same monthly budget supports a lower home price,” Krimmel said. “Market leverage and purchasing power are moving in opposite directions right now.”
Among the 99 largest metro areas, only 17 are currently deemed a buyer’s market, up from 13 this time last year, according to Realtor.com’s quarterly analysis of market conditions, dubbed “Market Clock.” By contrast, 27 metro areas are currently deemed seller’s markets, down from 39. Each metro area is positioned on one of the 12 clock positions that indicate whether buyers or sellers have the negotiating advantage and the clock winds through peak seller dynamics to loosening conditions that favor buyers into peak buyer dynamics and then through tightening conditions that revert back to favoring sellers.
The Midwest maintains the most solid seller-friendly dynamics, while the South is leaning more in favor of buyers. “That is a sharp regional split, not a single national pattern,” Krimmel said.
BUYER’S MARKETS
While the number of metro areas that favor buyers ticked down slightly between the second and third quarters, more cities are leaning in that direction. That’s why the report’s authors identified those eight cities as places that could soon tip into buyer’s-market territory.
Nationwide, the median listing price of a home fell 1.4% in September to $419,250, but the decline was even more pronounced in the South, where prices fell 2.5%. Honing in on Florida, home to eight of the country’s buyer’s markets, it’s understandable why buyers now have more leverage: Homes there are sitting on the market for a median of 81 days, compared to the nationwide average of 61, and they’re selling for 2.67% below the asking price,
The 17 buyer’s markets are:
- Bakersfield, California
- Baton Rouge, Louisiana
- Cape Coral, Florida
- Colorado Springs, Colorado
- Columbia, South Carolina
- Deltona, Florida
- Greenville, South Carolina
- Lakeland, Florida
- McAllen, Texas
- Miami, Florida
- Nashville, Tennessee
- New Orleans, Louisiana
- Orlando, Florida
- Port St. Lucie, Florida
- Riverside, California
- Sarasota, Florida
- Tampa, Florida
SELLER’S MARKETS
Even though there are still more seller’s markets in the country, they’re heavily concentrated in the Midwest. Indeed, half of the country’s hottest housing markets, according to a separate Realtor.com report, are located in either Wisconsin or Illinois.
Seven metro areas in the Midwest have been deemed seller’s markets every month since the site began tracking this information in 2021. And if Columbus, Ohio and Indianapolis, Indiana leave seller’s-market territory—which they appear poised to soon—that will end a several year run as seller’s markets.
The 27 buyer’s markets are:
- Akron, Ohio
- Albuquerque, New Mexico
- Allentown, Pennsylvania
- Boise City, Idaho
- Chicago, Illinois
- Cincinnatti, Ohio
- Cleveland, Ohio
- Columbus, Ohio
- Dayton, Ohio
- Detroit, Michigan
- Grand Rapids, Michigan
- Harrisburg, Pennsylvania
- Hartford, Connecticut
- Indianapolis, Indiana
- Kansas City, Missouri
- Madison, Wisconsin
- Milwaukee, Wisconsin
- Omaha, Nebraska
- Richmond, Virginia
- Rochester, New York
- San Francisco, California
- San Jose, California
- Scranton, Pennsylvania
- St. Louis, Missouri
- Toledo, Ohio
- Virginia Beach, Virginia
- Wichita, Kansas
