With the nation's residential real estate inventory at record lows – at least since 1999, when the National Association of Realtors began tracking the statistic – prospective homebuyers don't have a whole lot of choices to select from. Adding to their frustration is the fact that asking prices are flirting with all-time highs.
That being said, there are several cities around the country very much in "buyers' market" territory, according to recent analysis conducted by home listings website Zillow.
The cities of Baltimore, Philadelphia, Miami, Chicago and Houston are all locations in which those looking to purchase have more bargaining power, Zillow reported. For instance, in Maryland's most-populated city, the average home that's up for sale takes approximately 104 days after it's listed to be snapped up by an aspiring buyer. This helps explain why nearly 13 percent of listings in Baltimore are reduced from what they were initially going for.
Price cuts on nearly 12 percent of Miami's for-sale inventory
A similarly favorable buyers' market can be found in Miami. One of the Sunshine State's more eclectic cities and the second-most populous behind Jacksonville, Miami properties stay up for sale roughly 108 days. In so doing, approximately 11.5 percent of listings are selling for less than their initial price point.
As its title suggests, a buyer's market is one where real estate conditions are favorable to people looking to buy a new home. This generally means that there are more houses up for sale than individuals aiming to purchase. The laws of supply and demand eventually take root.
While budget-minded buyers may prefer a market that puts them in the driver's seat, it can be considered a poor reflection of a region or city's economic status. For example, demand may be low in buyer's market cities because unemployment is high or job growth is weak.
California continues to be a major sellers' market
On the opposite end of the spectrum are those cities that are more conducive to selling, or those in which demand outstrips supply. California is a veritable hotbed for home sales, with three of the top five cities on Zillow's list – San Francisco, San Jose and the capital city of Sacramento – located within the Golden State. Indeed, the median existing home in San Jose sold for $1 million in the closing quarter of 2016, according to the National Association of Realtors. And as Zillow noted, only 6 percent of houses in San Jose are selling at a discount. San Francisco is the only city in the country where there's fewer price-slashed listings at 5.5 percent.
Svenja Gudell, Ph.D., Zillow's chief economist, noted that whether you're in the market to sell or buy, you should have a strategy in place.
"If you're a buyer in a sellers' market, it's important to get preapproved for a loan so you can move as quickly as possible," Gudell advised. "It's also helpful to find an agent with a track record of winning bidding wars.
Gudell went on to suggest to sellers that they should consider making some renovations to their properties in order to inject it with more curb appeal. It's also advisable to be patient, as it can take awhile for shoppers to key in on the house that that's best for them and their budget.
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