Highlights from this report:
- More and more real estate markets are becoming “buyer friendly” in 2019.
- Last month, Realtor.com published a list of the top 10 markets for buyers.
- These are cities with sufficient housing inventory and declining prices.
- The metro areas of San Antonio, Los Angeles, Dallas and Chicago made the list.
Shifting Real Estate Trends
In many cities across the U.S., housing markets still tend to favor sellers over buyers. This is largely due to tight inventory conditions. In those areas, there just aren’t enough homes listed for sale to meet the demand from buyers.
But in some housing markets, conditions are shifting to favor buyers over sellers. This has been an ongoing trend throughout 2019, and one we’ve covered before.
In these relatively “buyer-friendly” real estate markets, housing inventory has increased over the past couple of years. This gives house hunters more options to choose from while easing competition at the same time.
In June, Realtor.com published a list of U.S. metropolitan areas where buyer’s markets are emerging. One of the common threads is an abundance of housing inventory.
Methodology: To develop their list, the company’s research team looked at a variety of factors. Specifically, they zeroed in on metro areas that favored buyers due to the following characteristics:
- The pace of home sales is below average and slowing.
- The number of properties listed for sale is growing.
- Sales prices are growing slower than average, or declining.
In other words, these are real estate markets where a typical home buyer should have plenty of options to choose from, without having to deal with fierce competition.
Top 10 Buyer-Friendly Housing Markets: Summer 2019
The table below shows the top ten “buyer-friendly” housing markets identified through this study. The “months supply” column shows the inventory of homes for sale, as of early summer 2019. The “months supply Y/Y” column shows how inventory has changed over the past year or so. (Note that inventory has risen in all of these housing markets, to some degree.)
|Metro Area||Months Supply||Months Supply Y/Y||Median Sales Price Y/Y|
|San Antonio-New Braunfels, Texas||5.7||5%||3%|
|Riverside-San Bernardino-Ontario, Calif.||5.2||15%||2%|
|Los Angeles-Long Beach-Anaheim, Calif.||5.1||34%||1%|
|Dallas-Fort Worth-Arlington, Texas||4.9||28%||0%|
|Tampa-St. Petersburg-Clearwater, Fla.||4.1||9%||-1%|
Note: This report was published in June 2019. So the numbers shown above might be a bit different today. But the overall trend is the same.
Let’s take a closer look at three of the noteworthy metros from the above list:
Albany, New York: Plenty of Inventory for Buyers
From a supply standpoint, the real estate market in Albany, New York clearly stands out. According to this study, the Albany-Schenectady-Troy metropolitan area had more than a 6-month supply of homes for sale as of June 2019.
Housing supply in Albany increased by 31% over the past year or so, as of the date this report was published. Buyers looking to make a purchase in the area should have plenty of homes to choose from — more so than in the past.
Additionally, home prices appear to have leveled off in the Albany area. So buyers might not feel the same kind of urgency today, compared to those who entered the market when prices were still climbing.
A July 2019 forecast from Zillow predicted that home values within the city of Albany would only rise by around 1.2% over the next year or so. (Note the all-important decimal there.)
Nashville, Tennessee: An Affordable Real Estate Market
The Nashville real estate market has been pretty hot over the past few years. The city has a lot to offer, including great nightlife and a strong job market. It’s also fairly affordable, compared to a lot of other metro areas in the U.S.
With all of its great features, Nashville has attracted new residents from all over the country. The local population grew by 10.5% from April 2010 to July 2018, according to the U.S. Census Bureau. This has increased demand for housing on both the rental and purchase side.
But the real estate market in Nashville has cooled over the past 12 to 18 months. Home prices are rising more slowly today than in previous years. Zillow predicts an increase of just 0.2% over the next 12 months.
Granted, that’s just a housing market forecast. It’s the equivalent of an educated guess. But it goes to show how the Nashville real estate market has slowed during 2019.
To quote the Realtor.com report:
“In Nashville and Dallas and San Antonio, the relative slowdown can be attributed to overheating. In the past three years in particular, home price gains in these Southern markets have reached unsustainable levels, exhausting buyers and causing the pace of sales to relent.”Source: Javier Vivas, Director of Economic Research, Realtor.com
This metro area has also experienced significant inventory growth over the past year or so. According to Realtor.com’s analysis, the supply of homes for sale shot up by 35% during the 12 months of their study.
Nashville is yet another real estate market that seems to be shifting to favor buyers over sellers.
Los Angeles, California: A Home-Price Plateau in 2020?
Home-price appreciation within the Los Angeles-Long Beach-Anaheim metro area has slowed down considerably over the past couple of years. That’s a common theme for many, if not all, of the housing markets in the table above. It’s also a common trend in other cities nationwide.
The median home value for this metro area rose to around $650,000 as of July 2019 — a modest gain of about 1% over the previous year. At least one forecasts for the Los Angeles real estate market predicts a price plateau over the coming months.
In July, Zillow labeled the L.A. housing scene as being “cold” and said: “Los Angeles-Long Beach-Anaheim Metro home values have gone up 1.1% over the past year and Zillow predicts they will fall -0.1% within the next year.
This is another metro area that has experienced major supply growth over the past couple of years. Back in May of this year, we reported that Los Angeles was among the top 10 housing markets in the U.S. for inventory growth. And you can see the 34% stat in the table above.
The way things are going now, the L.A. area could become a buyer’s real estate market later this year or in 2020. Especially if supply levels continue to rise, as they have been doing. Time will tell.
Disclaimer: This article includes housing forecasts and predictions from third-party sources not associated with the Home Buying Institute. HBI makes no claims or assertions about future economic conditions. Such forecasts are the equivalent of an educated guess and should be viewed as such.
Brandon Cornett is a veteran real estate market analyst, reporter, and creator of the Home Buying Institute. He has been covering the U.S. real estate market for more than 15 years. About the author