With the home shopping season well under way, Zillow took a look at recent data to determine markets where sellers have the power and those where buyers are in control. Our analysis shows many home sellers are thriving in the San Francisco, San Jose and Las Vegas metro areas, where price cuts are sparse and homes often sell for at or near their asking price.
On the other end of the spectrum, the Chicago, Milwaukee and Cleveland metros are buyers’ markets, with homes taking longer to sell and buyers logging average discounts of 5 percent off the asking price.
Zillow analyzed data on sale-to-list price ratio, number of days listings spent on Zillow and percent of homes on the market with a price cut, and ranked the 50 largest metro areas to determine whether buyers or sellers have more negotiating power in a given market. In this analysis, a sellers’ market is not necessarily one where home values are rising, but is a market where sellers are more likely to sell their home for close to asking price and where listings spend less time on the market. A buyers’ market is one where buyers have more bargaining power, thanks to listings lingering longer on the market and sellers being forced to cut asking prices.
“It’s refreshing to see some markets swinging back in favor of sellers, with asking prices being met and listings spending fewer days on market,” said Zillow Chief Economist Stan Humphries. “The housing recession has been long and rocky, and we’re seeing more balance during this summer selling season. Of course, many markets are still firmly in favor of buyers, and we expect that to continue until the recovery takes more of a hold nationwide.
“It may seem counterintuitive that some of the best markets for sellers are those that have seen the largest price drops since the housing recession began. However, this is likely due to investor interest, as many are buying distressed and non-distressed homes in bulk and transforming them into rentals. This investor activity is driving up prices for all homes in these markets. “
Further analysis and an interactive chart of the index can be found on the Zillow Research.
For a full ranking of metro areas or of the cities within a particular metro, or for the data that went into the buyer/seller rankings, contact firstname.lastname@example.org. Data for this report came from the May 2012 Zillow Real Estate Market Report.