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Prospective homebuyers in search of less competition and more selection may want to consider moving to the South, according to a housing market heat index from real estate marketplace Zillow.
That’s because a boom in construction in Texas and Florida has stabilized home prices and eased competition in those regions, Zillow’s new index shows. If fewer homes go pending quickly, more listings see price cuts or fewer buyers click on a listing, the index will trend toward buyers.
In most major U.S. cities, buyers this year face slim pickings compared with the number of homes for sale before the pandemic, however, inventory in Texas cities Austin and San Antonio has actually grown higher. In Florida, cities Tampa, Orlando and Jacksonville “have among the smallest deficits,” according to Zillow.
The Sunshine and Lone Star states were the only two in the nation last year where applications for building permits on new single-family residences exceeded 125,000, according to U.S. Census data. Applications for building permits in Florida jumped to 125,773 in 2023, up from only 99,831 in 2019. In Texas, the number of permits in 2023 was a whopping 149,860, up from 129,094 in 2019.
Those construction figures are no fluke, Robert Dietz, chief economist at the National Association of Home Builders, told CBS MoneyWatch.
“What stands out about Texas and Florida is strong population growth and strong employment growth,” he said. “That, combined with relatively lower regulatory burdens on land development and construction, means outsized gains for home construction in these states.”
No matter the state, buying a home has been a tough proposition for many Americans, as mortgage rates and home prices remain elevated. The average interest rate on a fixed 30-year home loan is 7%, according to Freddie Mac. Meanwhile, the median U.S. home sale price hit a record $383,725 in April, according to Redfin.
“Prospective buyers in most markets today are feeling less intense competition than in recent spring shopping seasons,” Skylar Olsen, Zillow’s chief economist, said in a statement. “However, the pool of homes for sale remains remarkably low. This means the nation remains a seller’s market despite high mortgage rates.”
Using listings-based metrics, Zillow researchers examined the nation’s 50 largest U.S. metro areas to determine where homes are selling the fastest, where price cuts are happening the most, where housing inventory is growing the most and where home values are climbing. The resulting index reveals which cities have the most buyer-friendly markets — less-frenzied competition, more robust and affordable inventory — and which are more favorable to sellers. In seller-friendly regions, homes sell quickly with few price cuts and fewer options from which to choose.
Though only the first four are considered buyer’s markets, here are the top 10 most buyer-friendly markets according to Zillow, along with average home values in each region:
- New Orleans, $242,593
- Miami, $489,836
- Tampa, Florida, $381,137
- Jacksonville, Florida, $359,942
- Memphis, Tennessee, $241,995
- Orlando, Florida, $397,716
- San Antonio, Texas, $290,355
- Austin, Texas, $468,707
- Houston, $311,004
- Atlanta, $386,193
Top 10 seller-friendly markets according to Zillow, along with average home values in each region:
- Buffalo, New York, $258,964
- San Jose, California, $1,642,546
- San Francisco, $1,198,046
- Hartford, Connecticut, $357,099
- Boston, $698,003
- Seattle, $755,037
- Milwaukee, $346,140
- Providence, Rhode Island, $478,431
- Minneapolis, $374,434
- New York, $658,935
