Where the Top 10 Sellers' and Buyers' Markets Are
NEW YORK ( MainStreet) Spring begins prime home selling season. Buyers are cruising their favorite neighborhoods on the hunt for "For Sale" signs with "Open House" flyers attached. The typical home buyer actively searches for 12 weeks and tours ten homes before making a purchase, with more than half of all homes sold in the warm weather months, according to Realtor.com. When it comes to negotiations, it's important to know whether you are in a buyers' or sellers' market.
Sellers in the West will likely have the upper hand in negotiations when selling their home, while buyers in Midwestern and East Coast metros will likely face less competition and have more room for bargaining on prices, according to research by Zillow.
For this analysis, a sellers' market is not necessarily one where home values are rising, but instead where houses are on the market for a shorter period of time, with fewer price discounts and homes are sold at prices near, or even higher than, their last listing price. Buyers' markets are defined as where homes stay on the market longer, price cuts occur more often and homes are sold for less than their listing price.
"The real estate data in markets on both coasts are telling markedly different stories," says Zillow chief economist Dr. Stan Humphries. "Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge. In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand."
Monthly and annual U.S. home value appreciation has slowed to its lowest pace in months, according to Zillow research. National home values were almost flat in February from January, but were up 5.6% year-over-year from February 2013.
"In general, buyers in sellers' markets this spring can expect tight inventory, increased competition and a greater sense of urgency," Humphries says. "Sellers in buyers' markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along. As we put the housing recession further in the rear-view mirror, the broad-based dynamics that applied during those days, when all markets were reacting similarly to nationwide economic conditions, are fading. Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced."
Inventory remains tight but has generally met demand, slowing the rise of home values. However, national home values are expected to rise another 3% to approximately $174,285 through February, 2015. National rents rose in February from January, up 0.2% to an average of $1,310. Year-over-year, rental rates were up 2.8% in January.