The housing market’s supply-and-demand imbalance has tilted in favor of homebuyers, according to a pair of new data reports.
Redfin (NASDAQ: RDFN) reports there is currently an estimated 1.9 million home sellers nationwide competing for an estimated 1.5 million homebuyers, a 33.7% surplus of sellers. Redfin noted there has not been this many sellers since March 2020 while the low number of buyers has not been seen since data keeping began in 2013 (not counting the April 2020 disruption created by the pandemic).
“The balance of power in the US housing market has shifted toward buyers, but a lot of sellers have yet to see or accept the writing on the wall – many are still holding out hope that their home is the exception and will fetch top dollar,” said Redfin Senior Economist Asad Khan. “But as sellers see their homes sit longer on the market and notice fewer buyers coming through on tour, more of them will realize that the market has adjusted and reset their expectations accordingly.”
Separately, a data report from Zillow (NASDAQ: Z, ZG) found the housing market is becoming friendlier to buyers, despite continued affordability challenges. As a result of this, 25% of sellers are cutting their asking price — a record high for April in Zillow’s data.
However, Zillow noted that buyers will find less competitive markets in some regions – they will have the best shot at being the only bidder on their dream home in the Sun Belt, while the ratio of buyers versus sellers is greater than 10:1 in four Northeast markets: Buffalo, Hartford, Providence and Boston. In those markets, the typical home sells in 10 days, and more than half sell above list price, a sign of bidding wars.
“This spring, we’re seeing signs of a more balanced housing market. Inventory is up 20% over last year, and about 1 in every 4 sellers are cutting prices,” said Zillow Senior Economist Orphe Divounguy. “Still, there are areas where competition is intense and there are bidding wars for most homes. To compete in these markets, buyers need their finances in order, full visibility into what’s for sale and an agent who is an expert negotiator in their corner.”
