In most major cities in the United States, buyers are facing limited choices compared to the number of homes for sale before the pandemic, according to a report by Zillow. However, the inventory in cities like Austin and San Antonio, Texas, is on the rise, while in Florida, cities such as Tampa, Orlando, and Jacksonville are also seeing an increase in the number of homes available for sale.
Florida and Texas were the only two states in the US last year with over 125,000 new single-family home building permits, based on US Census data. Florida saw a significant jump in building permit applications from 99,831 in 2019 to 125,773 in 2023. Texas also experienced an increase in building permit numbers.
Robert Dietz, the Chief Economist of the National Association of Home Builders, pointed out that Texas and Florida stand out due to strong population and employment growth. He mentioned that lower regulatory burdens on land development and construction in these states mean huge gains for residential construction.
Buying a house remains a challenging decision for many Americans across states, as mortgage rates and home prices remain high. The average interest rate for a 30-year fixed-rate mortgage stands at 7%, according to Freddie Mac data. Meanwhile, Redfin data shows that the median home sale price in the US reached a record high of $383,725 in April.
Zillow’s Chief Economist Skylar Olsen stated that while most markets are less competitive for potential buyers compared to the previous spring buying season, the inventory of homes for sale remains very low, making it a seller’s market despite high mortgage rates.
Zillow researchers analyzed the 50 largest metropolitan areas in the US using listing-based indicators to determine which cities have the fastest home sales, the largest price reductions, the most significant housing inventory growth, and where home values are rising. This analysis revealed which cities have the most favorable markets for buyers, with less intense competition, stronger inventory, and more affordability, as well as which cities favor sellers.
In buyer-friendly areas, homes sell quickly, have fewer negotiations, and offer limited choices.
According to Zillow’s Market Hotness Index, Florida metropolitan areas occupy three out of the four markets considered “buyer’s markets,” partly due to relatively adequate inventory. Five other markets are considered “neutral,” with one in Florida and three in Texas. One city in Georgia falls between neutral and seller markets.
Here are the top ten buyer-friendly markets according to Zillow data, along with the average home prices in each market:
1. New Orleans, Louisiana: $242,593
2. Miami, Florida: $489,836
3. Tampa, Florida: $381,137
4. Jacksonville, Florida: $359,942
5. Memphis, Tennessee: $241,995
6. Orlando, Florida: $397,716
7. San Antonio, Texas: $290,355
8. Austin, Texas: $468,707
9. Houston, Texas: $311,004
10. Atlanta, Georgia: $386,193
Florida and Texas dominate seven out of the top ten buyer-friendly markets in the country. These states are constructing a significant amount of housing, which is limiting price growth. The influx of new immigrants during the COVID-19 pandemic era led to an oversupply of homes in these states. However, as the immigration wave subsides, homes are remaining on the market, causing price growth to stall. In areas of Florida’s west coast, sellers are lowering prices due to the increased housing supply, leading to a surge in the time it takes to sell a home. Similar situations are also occurring in some areas of Texas.
According to a report by Redfin on April 25, six out of the ten metropolitan areas with the largest year-over-year supply increase in the US are in Florida, while two are in Texas. Among the top ten cities where sellers are most likely to reduce list prices, five are in Florida and two are in Texas.
Out of the 50 largest metropolitan areas in the US, 39 are either considered “seller’s markets” or “strong seller’s markets.”
The following are the top ten markets most favorable to sellers according to Zillow data and the average home prices in each region:
1. Buffalo, New York: $258,964
2. San Jose, California: $1,642,546
3. San Francisco, California: $1,198,046
4. Hartford, Connecticut: $357,099
5. Boston, Massachusetts: $698,003
6. Seattle, Washington: $755,037
7. Milwaukee, Wisconsin: $346,140
8. Providence, Rhode Island: $478,431
9. Minneapolis, Minnesota: $374,434
10. New York City: $658,935