Leading real estate marketplace Zillow has reported a 7.3% fall in the number of its listings for August as sellers take stock in the aftermath of the summer selling season.
Inventory remains 15% above its level 12 months ago, providing buyers with plenty of choice and a healthy negotiating position.
Currently, 20% of all sales are completed only after the owner has offered a discount, according to the National Association of Realtors (NAR).
Zillow reports that discounts have been applied to 26% of sales on its system – a near all-time high. Homes on its website need 27 days to sell. NAR data suggests it takes 31 days to strike a deal.
Either way, it’s a healthy market position in which the power of negotiation is slowly moving from the buyer and towards the seller.
Senior Economist at Zillow, Kara Ng, agrees: “Buyers who can afford a home and have been waiting for the right moment should look closely at what’s available now. Options are on the shelves, even if they’re not all fresh.
“Sidelined buyers should revisit their budget. Mortgage rates are lower than recent years, and in some markets sellers are more willing to deal. But don’t expect this window of opportunity to stay open indefinitely. Buyers’ leverage is easing.”
Sellers are in a strong position given that home values have increased 46.5% since February 2020. Equity in their homes is substantial, and as a result the financial incentive to re-enter the market is low, especially given current mortgage costs.
In its market report, Zillow named the most buyer- and seller-friendly markets today. They are:
Buyer-friendly – Miami, Tampa, Jacksonville, Austin and Seattle.
Why? – It’s a simple case of supply and demand. Each of these cities has more inventory than before the pandemic. In Seattle, for example, inventory is up 22% compared with 12 months ago.
Seller-friendly – Buffalo, Hartford, San Francisco, San Jose and Boston.
Why? Each of these cities has a strong economy currently, attracting an increasing number of professionals. As a consequence, the supply and demand dynamic again comes into play. The situation has tilted in the sellers’ favor because there are more buyers than homes for sale. Consequently, their rental markets are also tight.