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By Giulia Carbonaro
Senior Reporter
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While U.S. home prices continue rising and hit an all-time high in June, depressing sales, there are pockets of the country where buyers have a strong upper hand on sellers and their purchasing power has risen significantly over the past year.
One of these is Miami, Florida, where there were nearly 140 percent more home sellers than buyers in June, according to the latest data by real estate brokerage Redfin. That makes the Magic City the strongest buyer’s market in the nation—where supply exceeds demand, and buyers are able to negotiate lower prices.
By comparison, there were 48.5 percent more sellers (1,496,490) than buyers (1,007,735) at the national level, down from 48.7 percent in May and from 50.1 percent in December. Technically, that makes the U.S. housing market a buyer’s one, as experts consider any market with over 10 percent more sellers than buyers a buyer’s market.
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Realistically, U.S. homebuyers are struggling to feel this advantage as borrowing costs remain high, with the average 30-year fixed-rate mortgage around 6.5 percent, and home prices are still climbing, though much more slowly than they did during the pandemic.
The U.S. is only a buyer’s market right now for those who can afford to purchase a home. But in a handful of markets, most of which are concentrated in the South, the imbalance between sellers and buyers is so significant that buyers can negotiate the price they want or walk away from a deal if it is not right.
Former Pandemic Boomtowns Are Now the Strongest Buyer’s Markets
Roughly 70 percent of U.S. housing markets, or 33 out of the 47 U.S. metropolitan areas analyzed by Redfin, are currently buyer’s markets.
Many of the strongest buyer’s markets in the country—where sellers outnumber buyers by over or nearly 100 percent—are also metros that exploded during the pandemic, when historically low mortgage rates and the rise of remote work unleashed a home-buying frenzy in the Sunbelt and the Southeast.
These were the top 10 strongest buyer’s markets in the nation in June, based on the percentage by which sellers outnumber buyers, according to Redfin:
- Miami, FL: 139.7 percent
- Nashville, TN: 128.8 percent
- Houston, TX: 123.8 percent
- San Antonio, TX: 117.4 percent
- Austin, TX: 101.3 percent
- Orlando, FL: 98.3 percent
- Dallas, TX: 95.8 percent
- Phoenix, AZ: 94.2 percent
- Las Vegas, NV: 92.8 percent
- West Palm Beach, FL: 86.3 percent
Many of these cities—including Nashville and Austin—were considered ‘boomtown’ during the pandemic due to the explosion of demand from homebuyers. It is not a coincidence that they are both on this list now—and that a majority of the markets in the top 10 are concentrated in Florida and Texas.
The two states saw a surge in domestic migration in the pandemic years, as many remote workers relocated to their cities seeking more affordable housing, a lower cost of living, good weather, and a friendly tax environment. Both Florida and Texas reacted to this explosion of demand by building new homes, leading the nation in terms of new residential construction.
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But by the time these homes flooded the market, the home-buying frenzy had fizzled out across the country after mortgage rates reached heights of 6 to 7 percent, and remote workers were starting to be called back to the office by their employers in big cities in the Northeast and the West.
Many of the two states' hottest markets suddenly cooled down, with higher inventory contributing to a stark price correction that the rest of the country did not experience.
Why Buyers Aren’t Taking Advantage of a Buyer’s Market?
Miami, the strongest buyer’s market in the country, is a great example of why the advantage recently gained by homebuyers is not translating into more sales.
While buyers have so many options that they could technically negotiate cheaper deals, the starting price remains high, with the median sale price of a home in the city at $652,110 in May, according to Redfin. On top of that, buyers in Miami need to consider soaring home insurance premiums, at an average of $14,520 per year for a policy with $300,000 in dwelling coverage according to Insurify, and rising homeowners association (HOA) fees when it comes to the city’s many condos.
These same factors—which have worsened in recent years with the growing frequency and severity of natural disasters and the building safety legislation implemented in the aftermath of the Surfside collapse—are actually what is leading so many home and condo owners in Miami to put their property on the market.
The situation is less dramatic in metros like Nashville, Houston, San Antonio, and Austin, where the mismatch between buyers and sellers is mostly due to a glut of new construction and dwindling demand.
But these markets have also gotten a lot more expensive since the pandemic, with the median sale price of a typical home in Nashville and Houston respectively at $474,716 and $349,791 in May, up from approximately $300,000 and $240,000 in May 2019.
Even in these markets, the only buyers closing deals are those who have the budget to purchase a home in the current high housing costs environment. The U.S. median sales price for existing homes surged to an all-time high of $440,600 in June, according to the latest data by the National Association of Realtors (NAR), while existing-home sales were down 2.4 percent from May to a seasonally adjusted annual rate of 4.09 million properties.
"The biggest hurdle for Americans looking to buy a home is affordability, but those with the budget to move now—even in the face of record-high home prices and stubbornly high mortgage rates—have the power," Asad Khan, a senior economist at Redfin, said in a statement.
"In most of the country, there are more homes to choose from, fewer bidding wars and more room to negotiate on price, closing costs and repairs. It’s worth shopping around, negotiating aggressively and asking for concessions," he said. "Many sellers are more willing to compromise than they have been in years, especially as the buyer’s market drags on and sellers’ expectations are coming back down to earth."
Contact Newsweek editors on this story: Ben Kelly and James Debens
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