In many markets across the country, a shortage of listings of homes for sale is resulting in multiple bids with the property selling for more than the listing price. Without question those are a Seller’s Market in which the seller has the upper edge over buyers. This is not true across the board, however, as many markets are Buyer’s Markets as there are too many listings with properties remaining on the market for longer times resulting in reductions in asking price.
To identify markets in which the buyer has the upper hand, Zillow searched their data sets for markets having the highest number of days listed on the Zillow site and the percentage of listings with asking price reductions. The top-10 Buyer’s Markets based on their criteria are in the following table.
To read the article in Business Insider describing the analysis from Zillow click http://www.businessinsider.com/top-10-housing-markets-for-buyers-2017-2017-2
The number of months inventory for housing is calculated by dividing the number of active listings (supply) by the number sold in the prior 12 months (a proxy for demand), and then multiplying that times 12. As a real estate economist, I believe that 6 months inventory is normal for existing home sales. Eight months and up is a Buyer’s Market and 4 months and down a Seller’s Market. Each market is unique. Within markets, there is variance in months inventory from one neighborhood to the next and also in price ranges and product types.
The interaction of supply and demand determines who has the comparative advantage in housing sales between buyers and sellers.