{"id":178585,"date":"2024-10-25T14:09:25","date_gmt":"2024-10-25T20:09:25","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=178585"},"modified":"2024-11-05T09:24:15","modified_gmt":"2024-11-05T16:24:15","slug":"top-housing-markets-for-homebuyers-september-2024","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/top-housing-markets-for-homebuyers-september-2024","title":{"rendered":"The Latest Data Shows That Buyers Hold All the Power in These Markets"},"content":{"rendered":"\n

Zillow’s September market report<\/span><\/a> has something much more interesting to say than what we already know. <\/span><\/p>\n\n\n\n

What we already<\/span> knew is<\/span> that, yes, while mortgage rates are still elevated, even after the latest Fed cut, the year-over-year change is bringing back buyers and sellers across the country.<\/span> What many<\/span> of us <\/span>didn\u2019t<\/span> anticipate <\/span>is<\/span> that, as identified by the data coll<\/span>ected for the <\/span>report, the top buyer\u2019s markets are emerging predominantly in the South and Southeast, a <\/span>huge<\/span> reversal from the trends we’ve seen over the last four years.<\/span> <\/span><\/p>\n\n\n\n

According to the report, \u201cwhile the housing market nationwide remains neutral,\u201d <\/span>a number of<\/span> metro areas in Florida, Georgia, Texas, Tennessee, and Louisiana are \u201ctipping in favor of buyers.\u201d The inclusion of Florida will surprise no one at this point: <\/span>Enough has been said<\/span><\/a> about its unique\u2014and challenging\u2014housing situation that is making life difficult for buyers and sellers in the Sunshine State. <\/span><\/p>\n\n\n\n

But what about the other Southern and Southeastern areas? What is causing buyer\u2019s market conditions in these metro areas? More importantly, can investors trust these conditions will last as a longer-term trend, or is this a blip in market dynamics that will quickly return to high competitiveness?<\/span><\/p>\n\n\n\n

New Construction Is Paying Off<\/span><\/h2>\n\n\n\n

If you\u2019ve been following along here, you know we\u2019re not keen on attributing whole market shifts to a single cause. Usually, a more accurate way to explain what\u2019s happening in any given market is that several factors are collectively tipping it one way or another. <\/span><\/p>\n\n\n\n

So, although all the housing market reports point to recent interest rate drops as the reason why (some) housing markets are moving toward a more balanced state, this isn\u2019t the only or even the <\/span>main<\/span>, reason why this is happening. Instead, what we\u2019re seeing across several key metro areas in the South, including <\/span>Austin<\/span><\/a> and <\/span>San Antonio<\/span><\/a>, Texas; <\/span>New Orleans<\/span><\/a>; <\/span>Nashville<\/span><\/a>, Tennessee; and <\/span>Atlanta<\/span><\/a>, is a combination of a dramatic increase in home construction and a long-overdue attitude shift from sellers.<\/span><\/p>\n\n\n\n

As far as home construction goes, it\u2019s really paying off for rebalancing the market, and there is a clear correlation between more homes built and markets tipping in buyers\u2019 favor. The most up-to-date <\/span>new construction report<\/span><\/a> from researchers at Construction Coverage identifies Austin-Round Rock-San Marcos, Texas, as the market building more new homes than any other county in the U.S. Nashville, San Antonio, and Atlanta are all in the top 15. And these are all currently buyer\u2019s markets, according to <\/span>Zillow\u2019s latest market heat index<\/span><\/a>.<\/span><\/p>\n\n\n\n

\"market
Zillow’s Market Heat Index<\/em><\/a><\/figcaption><\/figure>\n\n\n\n

Daniel Cabrera, owner and founder of Sell My House Fast SA TX, agrees that new construction has been a <\/span>big<\/span> factor in the shift in Southern markets: It \u201chas created an increased supply of resale homes and is giving more negotiating power to buyers,\u201d he told BiggerPockets.<\/span><\/p>\n\n\n\n

New Orleans is the outlier here. The housing market in this metro continues to rely on the appeal of its historic charm. <\/span>Not much<\/span> new construction is <\/span>going on<\/span> here: Louisiana is No. 15 on the list of states with the lowest new construction rates, according to researchers at Construction Coverage.<\/span> <\/span><\/p>\n\n\n\n

New Orleans is not immune to the statewide <\/span>home insurance crisis gripping Louisiana<\/span><\/a>. The situation there is much more similar to Florida than <\/span>to<\/span> the cities in Texas or somewhere like Nashville.    <\/span><\/p>\n\n\n\n

Sellers\u2019 Attitudes Are Shifting<\/span><\/h2>\n\n\n\n

You may have noticed that many of the buyer\u2019s markets are now in areas that only three years ago were experiencing an unprecedented market boom. Austin\u2019s dramatic rise is <\/span>by<\/span> now an apocryphal tale: It was one of the pandemic\u2019s hottest housing markets. And it seems <\/span>that,<\/span> in Austin at least, home sellers were <\/span>just<\/span> unwilling to let go of that sense of the balance of power being firmly in their favor. As recently as July this year, Austin remained a neutral market despite months of growing inventory and slowing sales.<\/span><\/p>\n\n\n\n

An article on <\/span>KXAN<\/span><\/a> described this state of affairs as sellers being mentally \u201cstuck in a market <\/span>that is<\/span> ceasing to exist.\u201d Austin Board of Realtors economist Dr. Clare Knapp said in the article, \u201cThat\u2019s probably a by-product of what we saw during the pandemic when homes were <\/span>really<\/span> flying off the shelves. We\u2019re still seeing remnants of that mentality amongst sellers.\u201d<\/span><\/p>\n\n\n\n

It took a few more months, but eventually sellers in the area <\/span>did begin<\/span> showing more flexibility<\/span>, <\/span>lowering price expectations.<\/span> As of mid-September, Austin is one of the top metro areas where sellers are slashing their prices, according to <\/span>Realtor.com<\/span><\/a>. <\/span>In fact,<\/span> 25% of listings were showing reduced prices, which<\/span>, of course,<\/span> has an emboldening effect on buyers who are getting a clear signal that the market is cooling.<\/span> <\/span><\/p>\n\n\n\n

Other buyer\u2019s markets are exhibiting similar patterns, with <\/span>Realtor.com data<\/span><\/a> showing 17.4% of homes sold with reduced prices in Nashville and 17.5% in Atlanta. By comparison, a strong seller\u2019s market like <\/span>Buffalo, New York<\/span><\/a>, only had 10.8% of properties for sale with reduced prices. <\/span><\/p>\n\n\n\n

Even with mortgage rates coming down, sellers in cities in the Northeast continue to benefit from inventory shortages. It\u2019s unlikely that their mentality will shift in the same way as that of Southern sellers in the immediate future. <\/span><\/p>\n\n\n\n

What Can Investors Expect?<\/span><\/h2>\n\n\n\n

If you are enticed by the prospect of casting your net into a Southern area that seems less competitive, you may be in luck, but you\u2019ll still have to do your <\/span>local research<\/span><\/a>. <\/span><\/p>\n\n\n\n

Brandi Simon<\/a>, a real estate investor working in the <\/span>Dallas-Fort Worth<\/span><\/a> area, tells BiggerPockets that her current experience is that \u201cbuyers definitely have a bit more leverage now, but it\u2019s still neighborhood-specific. Well-priced properties in good areas are still selling. It’s more of a leveling off than a full switch to a buyer’s market.\u201d<\/span><\/p>\n\n\n\n

In other words, <\/span>areas that are premium and competitive likely will<\/span> remain so for longer.<\/span> Sure, <\/span>it <\/span>might be a bit<\/span> easier to get<\/span> a foot in the door in these markets.<\/span> \u2018\u2018I\u2019m seeing fewer bidding wars,\u201d says Simon. \u201cFor cash buyers like me, the opportunities are there\u2014especially with distressed properties.\u201d Homes in desirable areas will still sell, but investors may feel a little less heat <\/span>in terms of<\/span> asking prices. <\/span><\/p>\n\n\n\n

That\u2019s as of right now. The balance of supply and demand won\u2019t stay the same for very long in these areas. The most likely scenario is that a new influx of buyers will re-create a competitive environment. <\/span><\/p>\n\n\n\n

Robert Washington, an investor-focused broker in the <\/span>Tampa\/St. Petersburg<\/span><\/a> area, tells BiggerPockets that the buyer\u2019s market situation in the South \u201cwill be relatively short-lived,\u201d because \u201cas mortgage rates come down closer to 6%, we will start to see buyers that have been sitting on the sidelines coming back into the market.\u201d <\/span><\/p>\n\n\n\n

As far as Washington is concerned, the Sunbelt surge isn\u2019t even over yet: \u201cI feel like there is plenty of pent-up demand from people still planning to move to the South from areas like the Northeast and West Coast.\u201d <\/span><\/p>\n\n\n\n

Migration to the South is likely a long-term trend <\/span>that has been<\/span> temporarily dampened by overinflated home prices, high interest rates, and depletion of the available inventory by previous waves of said migration.<\/span> If you can stay ahead of the next wave, you\u2019ll reap the benefits of the buyer’s market scenario. Just don\u2019t expect those conditions to be there for very long. <\/span><\/p>\n\n\n\n

Final Thoughts<\/span><\/h2>\n\n\n\n

If you\u2019ve been <\/span>thinking about<\/span> investing in the South, now is <\/span>definitely<\/span> the time to make a<\/span> move.<\/span> With new construction booming in Texas, Tennessee, and Georgia and more realistic seller attitudes in <\/span>major<\/span> metros in those states, you have a good chance of securing investment properties at a better price\u2014before competition increases <\/span>once<\/span> again from a new wave of buyers.<\/span><\/p>\n\n\n\n

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\n \"\"\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Zillow’s September market report has something much more interesting to say than what we already know.  What we already knew is that, yes, while mortgage rates are still elevated, even […]<\/p>\n","protected":false},"author":613618,"featured_media":172377,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7364],"tags":[],"class_list":["post-178585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-markets"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/178585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613618"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=178585"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/178585\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/172377"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=178585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=178585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=178585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}