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Zillow: Power Shifting to Buyers in California, Elsewhere in West

In 20 of the 35 largest metros, market conditions favor buyers more than they did a year ago, according to the Zillow® Buyer-Seller Index.

Limited inventory and rapid price appreciation have kept sellers firmly in the driver’s seat for several years as the United States recovered from the housing market collapse. Now, buyers are gaining more negotiating power as the housing market slows, especially in some of the nation’s hottest markets.

In 20 of the 35 largest metros, market conditions favor buyers more than they did a year ago, according to the Zillow® Buyer-Seller Index. The index is based on the share of listings with a price cut, how long it takes to sell a home, and the sale-to-list price ratio. By comparing each metro across time, this analysis shows whether the market is cooler (favoring buyers) or hotter (favoring sellers) than it was in the past.

buyers

California markets have seen the biggest shift toward buyers since last January, led by San Jose, which has seen the most significant swing. San Francisco, San Diego, Los Angeles, and Denver round out the top five markets where buyers will have an easier time navigating the market than they would have in recent years.

Even though San Jose and San Francisco have cooled exceptionally, they are still the hottest markets compared with others around the country, markets where listings see few price cuts, homes don’t stay on the market for long, and sale-to-list price ratios are higher. In these two Bay Area markets, home prices are so prohibitive, the typical buyer must put more than 20 percent down to keep mortgage payments at or below 30% of monthly household income.

San Jose buyers would need a 49 percent down payment, or $614,100, nearly three times as much as the national median home value. Buyers in San Francisco (43 percent), Los Angeles (43 percent) and San Diego (31 percent) would also need to put down more than 20 percent.

“It is no surprise that the markets which pushed the bounds of affordability over the housing recovery are now experiencing significant cooling,” said Skylar Olsen, Zillow Director of Economic Research. “As down payments and mortgage payments far outpaced incomes, buyer demand eventually exhausted itself. Those buyers looking in cooling markets will likely welcome the relief, although the entry price is still high. Inventory is returning and spending more time on the market, meaning their decision making can be made with a cooler head.”

While some of the hottest markets slowed down over the past year, others have become more seller-friendly. Miami – which tends to see large fluctuations – has seen the biggest overall shift toward favoring sellers over the past year, with homes selling about a week faster than they did a year ago.

Markets That Have Cooled (Ranked in Order of Biggest Cooldown)

Metro

Median
Home Value

Listings with
a Price Cut

Sale-to-List
Price Ratio

Days on
Market

San Jose, CA

$1,245,800

15.3

97.2%

61

San Francisco, CA

$957,400

11.5

98.6%

57

San Diego, CA

$591,400

21.3

95.7%

75

Los Angeles-Long Beach-Anaheim, CA

$652,300

17.4

97.1%

75

Denver, CO

$405,300

18.1

97.2%

65

Dallas-Fort Worth, TX

$242,600

19.9

96.9%

71

Seattle, WA

$489,700

15.2

96.6%

77

Sacramento, CA

$408,700

17.3

96.9%

67

Portland, OR

$397,300

18.8

96.8%

80

Riverside, CA

$367,100

17.5

96.7%

83

Las Vegas, NV

$277,900

22.8

96.9%

69

Charlotte, NC

$206,200

16.8

96.9%

71

Tampa, FL

$213,600

23.2

95.6%

75

San Antonio, TX

$192,800

20.0

98.6%

77

Austin, TX

$308,200

19.1

95.1%

74

Kansas City, MO

$191,600

14.5

98.2%

66

Boston, MA

$467,000

15.5

97.1%

74

Chicago, IL

$224,800

18.2

94.2%

102

Columbus, OH

$189,900

16.5

96.6%

71

Atlanta, GA

$217,500

16.1

97.0%

77

 

Markets That Have Heated Up (Ranked in Order of Biggest Increase)

Metro

Median
Home Value

Listings with
a Price Cut

Sale-to-List
Price Ratio

Days on Market

Miami-Fort Lauderdale, FL

$283,800

16.7

93.9%

99

Houston, TX

$205,500

19.4

94.8%

89

Pittsburgh, PA

$143,900

16.8

93.7%

87

Philadelphia, PA

$232,700

17.9

95.7%

90

St. Louis, MO

$167,000

16.1

95.7%

76

Cincinnati, OH

$168,900

15.7

95.6%

74

Cleveland, OH

$145,600

15.5

94.5%

82

Phoenix, AZ

$264,900

19.2

97.4%

61

Detroit, MI

$160,000

17.5

94.7%

78

Indianapolis, IN

$163,900

17.9

97.0%

70

Orlando, FL

$237,100

20.4

95.8%

84

Baltimore, MD

$267,900

19.2

96.4%

97

New York, NY

$438,300

14.6

95.7%

132

Washington, DC

$406,200

14.8

97.4%

82

Minneapolis-St Paul, MN

$268,100

14.4

97.1%

74

Zillow is a registered trademark of Zillow, Inc.

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