Buyers waiting on the sidelines, waiting for the market to turn in their favor. Sellers refusing to adjust their prices, in the hopes that conditions will swing their way: It’s the stuff brokers’ nightmares are made of.
Getting a better sense of which markets across the U.S. lean in favor of the buyer or seller might lead to more sensible pricing decisions and boost activity. And a new analysis aims to do just that.
According to the analysis, which was done by the Wall Street Journal and Realtor.com, California’s Contra Costa is the nation’s most extreme seller’s luxury market. Its absorption rate, defined as the number of monthly sales divided by number of listings, was a whopping 61.5 percent. (The analysis was done on a county level, with the rate taken as the average of the three ZIP codes with the highest rate in the county.) In some ZIP codes there, every home priced at $1 million and up goes into contract in just over a month.
Contra Costa is followed by Sacramento, California, where the absorption rate was 59.8 percent. Other top seller’s markets include Loudoun, Virginia, (53.1 percent) and Broward, Florida (9.2 percent).
According to the Journal, tips for buying in a seller’s market include pre-interviewing local contractors to quickly understand how much repairs will cost, waiving contingencies, and writing a seller a personal letter explaining why the house should be yours.
On the other side of the spectrum is the buyer’s market, where supply far outstrips demand and sales volume is relatively low. According to the analysis, the top buyer’s market in the U.S. is Suffolk County, New York, which has an absorption rate of just 1.1 percent. Suffolk County, which includes the wealthy real-estate playground of the Hamptons, has seen inventory rise 84.2 percent since the second quarter of 2018, according to a report from Douglas Elliman.
Suffolk County is followed by Monroe County, Florida, (2.2 percent) and Cook County, Illinois, which includes Chicago (2.4 percent).
The paper’s tips for navigating a buyer’s market include playing the waiting game until prices drop, but also making offers to get the conversation started with sellers. Talking to contractors can also help get a sense of how much it’ll cost to get a fixer-upper ready. [WSJ] — TRD Staff