Texas and Florida metros lead the greatest destinations for buyers in Zillow’s new market heat index, accounting for seven of the top 10 rankings. However, according to Zillow’s most recent market report, sellers outnumber buyers in the majority of the country’s 50 largest metros and the U.S. as a whole.
“Prospective buyers in most markets today are feeling less intense competition than in recent spring shopping seasons. Pressure is easing up as mortgage rates raise costs and sellers return,” said Skylar Olsen, Zillow Chief Economist. “However, the pool of homes for sale remains remarkably low. This means the nation remains a seller’s market despite high mortgage rates—homes are selling faster, with more buyer interest over any one listing, than pre-pandemic.”
Strong building in Texas and Florida has helped restore inventory levels in those areas, reducing competition. Austin and San Antonio are two of only three markets with higher inventories than before the pandemic, while Tampa, Orlando, and Jacksonville have some of the smallest gaps.
Buffalo, New York, is the top market for sellers, as predicted by Zillow in January to be the hottest market in 2024. The top metros for sellers include more expensive—and inventory-constrained—coastal tech hubs, more affordable spillover areas in the Northeast (Hartford and Providence), and hot Upper Midwest metros Milwaukee and Minneapolis.
Springtime Competition Coasts as Costs and Inventory Inches Up
Both inventory and new listings showed significant monthly and year-over-year increases. Buyers had a lot more alternatives to pick from, as inventories increased 6.4% from March to April and 18% over the previous year, the second-largest yearly increase since at least 2019. They also had more new listings, which were up about 11% month-over-month and almost 16% year-over-year. Despite April’s improvements, total inventory remains 36% below pre-pandemic levels.
Mortgage rates, which rose above 7% for the first time this year, along with these infusions of inventory, kept competition stable at a time when it generally ramps up. Home values in the U.S. increased by 1.2% between March and April, and are now 4.4% higher than a year ago. That represents a minor decrease from the 4.6% annual growth reported last month. The average US home is now worth $359,402.
In April, the share of listings with a price cut reached 22.4%, the highest rate in six years and a considerable increase from 17.2% the previous year. Price cuts might be a sign of diminishing demand, indicating softer price growth in the future, or they can be a normal process of gauging the market as sellers and their agents devise their pricing strategy.
The latter scenario grows more plausible in today’s fast changing industry, since there are few recent transactions to compare. Homes sold in April in 13 days, which is unusually rapid by historical norms. However, this is three days slower than last April, marking the first period since June 2023 that sales have fallen below the previous year’s pace.
Buyer competition is less severe than in previous spring shopping seasons, and it is diminishing rather than spiking, as a result of high prices and an influx of listings. However, because inventory is low, sellers have more bargaining power than they did before the pandemic.
Would-be buyers saw intense competition in sunny Texas and Florida markets that were hit hard earlier in the pandemic, but are no longer experiencing such a frenzy due to significant building in many of these areas, which has helped restore inventory levels. Austin, Texas, and San Antonio are two of just three markets that have greater inventory than before the pandemic, while Tampa, Orlando, and Jacksonville, Florida, have some of the smaller shortfalls. Florida metros account for three of the four “buyers markets” according to Zillow’s market heat index, thanks in part to their relatively ample inventory.
Home sellers have a modest advantage nationwide, though it remains significantly less than in previous years. In conclusion, Buffalo, the Bay Area, and the Northeast are among the finest markets for sellers to choose from and settle down.
To read the full report, including more data, charts, and methodology, click here.
