Source: Realtor.com —
Sellers are sitting in the driver’s seat of today’s idling housing market. So why are they stalled behind the wheel?
Typically, as winter turns to spring, the housing market thaws. Sellers prepare their homes for showings and scrutiny, and buyers review their wish lists and budgets. But with home prices falling from their peaks in many areas, mortgage interest rates around 7%, and tons of economic uncertainty, many prospective sellers are still sitting on the sidelines. New home listings, the lifeblood of the real estate market, are down by double-digit percentages over last year.
For some home sellers, apprehension is leading to paralysis. They have plenty of questions: Will buyers show up ready to bid high despite the financial challenges they’re facing? How much should owners be spending on repairs and cosmetic touches to make their homes more appealing? And has the best moment to sell already passed?
While it’s still a seller’s market, the days when a homeowner could list a property that needs renovations, hasn’t been staged (or even cleaned), and receives 25 offers well over the asking price within a weekend are mostly over. Many buyers can’t afford the high prices and rates, so bidding wars have died down, as have offers coming in well over list prices. These days, many sellers are accepting lower offers as their homes languish on the market for months.
However, there are places where sellers have more of an advantage. These are the real estate markets where prices are still strong and homes are still selling briskly. And the data team at Realtor.com® found these top markets for sellers.
Many of these are smaller, more affordable metropolitan areas in the Midwest and South where regular buyers as well as investors can still find bargains.
“There’s a lot of talk about home prices down from the peak,” says Realtor.com Chief Economist Danielle Hale. “But year over year, a lot of markets are still up.”
Many sellers have been reluctant to list their homes, resulting in about 10% fewer properties going up for sale in January and February compared with the previous year. One main reason: Most sellers are also buyers, and these days they don’t relish the idea of giving up their current low mortgage rates and emerging into a tight, expensive buyer’s market with much higher rates.
The good news for sellers is the high home equity many have built during the past few years. Even if they can’t get as much as their neighbors did during the height of the COVID-19 pandemic, their homes have still likely increased in value if they’ve had them for a few years.
“Focusing on the very recent fluctuation in prices, you might miss the forest for the trees,” says Hale. “Even if people don’t get the maximum sales price they might have six months ago, the equity is still usually going to equate to a lot of cash. [That] gives them options for their next move.”
To find areas that offer better market conditions for sellers, we looked at the top 150 metropolitan markets over the past year. We focused on those where homes are selling faster than in most of the country and where the price per square foot has risen the most annually. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
In almost every city across the country, the time spent on the market has gone up year over year. In February, homes spent a couple of days short of 10 weeks on the market. That’s up from February 2022, when homes spent about six and a half weeks on the market.
We limited our list to just one metro per state to ensure geographic diversity.
Here’s a look at where sellers can expect to have more welcoming conditions right now.
1. Davenport, IA
February median list price: $208,700
Year-over-year increase in price per square foot: +38.4%
If there’s a housing downturn, someone forgot to tell the good folks of Davenport.
The metro area straddles the Mississippi River, along the border with Illinois, and includes Bettendorf on the Iowa side and two smaller cities on the Illinois side, Moline and Rock Island. The city’s location on a waterway has helped establish it as a regional transportation and trade hub.
It’s also been one of the more affordable markets in the country for a long time. That might help protect it from the current slowdown that’s swept the national housing market.
“We’re very insulated here from a lot of the national trends,” says Delia Dreifurst, a Realtor® at Keller Williams Midwest Partners in Bettendorf.
“The price point is so much lower than on the coasts,” she continues, “so we sit in this sweet spot, where homes still appreciate but they’re also still affordable.”
With a median listing price just below $209,000 in February, Davenport homes cost around half of the national median list price of $414,950, according to the most recent Realtor.com data.
Astonishingly, those prices are up almost 40% compared with the same time last year. On top of that, homes are selling faster now than they did a year ago—one of only five of the 150 largest metros across the U.S. where the time homes spent on the market is less now than last February.
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