The latest data shows that the real estate market in the United States is experiencing the strongest buyer’s market in over a decade. However, despite this trend, housing prices remain high, and the issue of housing affordability continues to be severe, leaving many potential buyers locked out due to the high prices.
According to data released by the real estate brokerage firm Redfin, in October, there were 36.8% more sellers than buyers, marking the largest gap between the two since records began in 2013. The company defines a “buyer’s market” as one where there are at least 10% more sellers than buyers.
The last time such a strong buyer’s market was seen was after the 2008 financial crisis when home prices across the United States plummeted.
Research analysts at Redfin point out, “Only for those who can afford to buy a home can this be called a buyer’s market. In reality, many Americans have been shut out of the real estate market due to soaring prices, as affordability has worsened.”
This contradiction highlights the complexity of the current real estate market: while housing supply has increased significantly, many people still cannot afford to buy a home due to high prices.
According to CNBC, a recent report by the National Association of Realtors confirmed that housing affordability is the biggest challenge facing real estate companies, far surpassing other issues like industry costs.
Jessica Lautz, the association’s deputy chief economist, stated, “Real estate companies are on the front lines, able to witness firsthand how housing affordability and local economic conditions are impacting clients’ home purchases.”
Despite a continuous softening in home prices, data from the real estate data firm Cotality shows that national home prices in September were still 1.2% higher than the same period last year. Of more concern is that current prices are approximately 50% higher than those from five years before the pandemic.
Although mortgage interest rates have fallen from recent highs, they are still roughly double what they were at the start of the pandemic. Cotality’s data reveals that about 75 of the top 100 housing markets are still considered overvalued, with high prices remaining a major obstacle to purchasing a home.
Redfin’s report also indicates that currently, markets in cities like Austin, Southwest Florida, Portland, and Denver are among the strongest buyer’s markets in the United States.
In Austin, the number of property sellers exceeds buyers by 130%. Zillow’s forecast for the next 12 months suggests that local home prices may decline by 1.8%, with a higher proportion of price reductions in mid-priced listings.
Southwest Florida (Punta Gorda, Cape Coral–Fort Myers) is also one of the strongest buyer’s markets in the country, with Zillow predicting a 1.9% decrease in prices for Punta Gorda.
Portland is one of the cities in the United States with the highest percentage of price reductions. In September, local monitoring data also showed that nearly half of the listed properties had experienced price reductions.
In Denver, the percentage of price reductions across various price ranges in September ranked among the highest in the country. At the same time, an increase in the number of homes for sale has further widened the bargaining space.