May 19, 2021
There has never been a better time to sell a house.
While many worried the coronavirus pandemic would put an end to the real estate market as we know it, what we’re now seeing in markets around the country are homes are being sold at a record place, often for well over asking price. But what does this mean for buyers? If American real estate as a whole is a seller’s market right now, is there any hope for those looking to snap up a property or two?
It turns out, the answer is yes. There are still many locations around the country where housing prices are actually dropping, making them more buyer-friendly for the time being.
DiversyFund used housing data from Zillow to compile a list of 20 U.S. metros that had the biggest price cuts during March 2021, the most recent month of data available. In this story, a house listing is considered to have a price cut if it has a “list price at the end of the month that’s less than the list price at the beginning of the month,” according to Zillow. The metros are ranked according to the median price cut expressed as a percentage of the list price, and ties were broken by the price cut expressed in dollars. The share of listings that had a price cut in March 2021, as well as the March 2021 median list price and February 2021 median sale price, were included for each metro as well if the data was available.
Keep reading to discover where you ought to check listings if you’re looking to invest in the real estate market sometime soon.
In August 2020, author and former hedge-fund manager James Altucher declared in an op-ed that “New York City is dead forever.” While he was wrong about the vitality of the city, he was right about one thing: Wealthy New Yorkers were leaving the city in droves. Roughly 3.57 million people—many of them homeowners and potential buyers—left the city between January and December 2020, according to a study by Unacast that analyzed anonymized cell phone location data. As the number of wealthy and potential buyers went down, so did house, condo, and apartment prices.
While overall home prices are up in St. Louis, increasing by 15.6% since April 2020, many sellers still find themselves having to slash prices. This is likely due to the fact that houses stayed on the market in March 2021 for much longer than other metro areas, at a median rate of 72 days, according to a realtor.com Monthly Housing Trends Report.
One possible reason for the recent home price cuts in Springfield, Massachusetts, is the increased number of distressed homes on the market that can affect appraisal values—and offers—throughout the neighborhood. Distressed homes are either bank-owned, in foreclosure, or being sold by their owners at a deeply discounted rate in an effort to avoid foreclosure.
A shrinking population size could be the culprit behind housing price cuts in Detroit. Detroit has lost more of its population over the past decade than any other major city, according to U.S. Census Bureau data. So while there is an inventory shortage in the city when it comes to the number of homes on the market, a decrease in the number of potential buyers could also be driving prices down from all-time highs.
The housing market in Dayton, Ohio, has seen a greater fluctuation in the last few months than many others on our list. It’s currently a buyer’s market in the city, with more homes available than there are prospective buyers, according to findings from Realtor.com. As supply has grown and demand has dwindled, sellers have been forced to cut a pretty hefty percentage off of their asking costs.
– Median price cut in March 2021: $10,000 (3.39% of list price in metro)
– Share of listings with a price cut in March 2021: 6.8%
– Median list price in March 2021: $304,900 (19.8% greater than March 2020)
– Median sale price in February 2021: $226,667 (14.3% greater than March 2020)
The best time of year to sell a home in most parts of the U.S. is widely understood to be the first few weeks of May. In Allentown, Pennsylvania, however, listening to this advice may have cost sellers their competitive edge. An influx of available houses on the market there in April and May 2021 contributed to lowered asking prices—and lower offers being accepted.
The housing market in Worcester, Massachusetts, tells a similar story to that of Springfield, Massachusetts; namely, over the past few months, the number of distressed homes for sale has jumped by 2%. Fortunately for sellers, the amount of time a home spends on the market has shortened significantly; after reaching a median of 76 days in February 2021, median days on the market dropped to 51 in April 2021.
The housing market in Winston-Salem, North Carolina, is deadlocked. An abnormally small amount of houses for sale—roughly a three-week supply—means prospective buyers are struggling to find a new place to live and that houses on the market could see close to two dozen offers in a matter of days. For would-be sellers seeking to avoid two mortgages, buying a home before putting theirs on the market is essential but causes a further throttling of available homes.
Overall, Rhode Island saw among the biggest statewide annual declines in distressed sales rates, from 18% in the first quarter of 2020 to 1.9% in the first quarter of 2021. An uptick in available inventory between April and May of 2021 may add up to a drop in home prices for buyers; as of March of this year, the rate of sales statewide had begun to moderate.
Just like New York City, the Bay Area saw a huge exodus of residents during the coronavirus pandemic as newly remote workers looked for cheaper and more spacious places to call home. With fewer people looking to buy in the typically expensive metro region, prices fell. That may be turning around, as homes in San Jose, California, along the southern shore of the San Francisco Bay, took an average of just 12 days to sell as of April 2021.
Many people who left New York City during the height of the coronavirus pandemic moved to Hartford, Connecticut, seeking more spacious living arrangements within reach of the metropolis. This led to a white-hot housing market in the Connecticut town for much of 2020 and even early 2021. However, it appears that inventory may be on the rise once again, which could help account for reduced median list prices.
Pittsburgh certainly saw some increased demand for homes during the height of the pandemic, but unlike other metros on the list, the city seems to have returned to normal much quicker. There are more homes on the market now than there were six months ago; this jump in inventory and more days on the market before being sold (55 days in April 2021) likely contributes to the percentage of homes with price cuts.
The number of new houses entering the market each month in Stamford, Connecticut, is nearing pre-pandemic levels. While asking prices overall are still trending upward year-over-year, the city is officially a buyer’s market with supply outweighing demand and many sellers significantly reducing their initial list prices to lure buyers.
The size of price cuts buyers in San Francisco see depends on where, exactly, they’re shopping. Downtown condos are extremely cheap (relatively speaking) as many remote workers have been leaving in search of greener, roomier pastures. On the other hand, those looking to buy in the suburbs of the city will have a much harder time doing so and aren’t as likely to see price cuts.
A 2020 Lending Tree report found more people moved out of the downtown Cleveland area during the pandemic than out of any other major city. It’s likely that this massive exodus caused home prices to take an initial tumble. That’s starting to shift, with April 2021 numbers indicating demand is high and supply is shrinking throughout Ohio’s real estate market.
Syracuse saw a bigger jump in median list prices between March of 2020 and 2021 than any other metro on this list. But with an influx of homes hitting the market and an increase in the median number of days those homes spend on the market, (112 in April 2021), the city is a buyer’s market with sellers dropping list prices and happy to negotiate sale prices.
The New Haven metro region ranked among the top 25 outbound cities for national migration in 2020, according to a study by United Van Lines. This may be due in part to cases of violent crime there jumping 50% from the year before. Realtor.com reports Westville, East Rock, and Fair Haven among New Haven’s most desirable neighborhoods.
A thoroughly middle-class city, Akron, Ohio, now has more renters than homeowners. While this may seem like an ideal situation—plenty of renters looking to take advantage of low-interest rates to buy their own homes—in actuality it’s the opposite. High rents trap people in a cycle of being unable to save up enough for a down payment on a home which results in fewer buyers. As more single-family homes have been divided into apartments amid past waves of foreclosures, housing quality has been reduced which causes home values throughout neighborhoods to drop.
The median number of days a home in Buffalo spent on the market before being sold climbed between August 2020 and March 2021, eventually topping out at 105 days. Despite this, median sale prices year-over-year show an improving real estate market for sellers throughout the city. Buyers benefitted by the number of available homes jumping 2.5% between February and March 2021.
The median number of days a house in Rochester, New York, spent on the market rose steadily for eight months, peaking at 76 days in February 2021 before dropping down to 55 days in April. Today, the supply of homes is greater than demand, contributing to a drop in home prices. That may be short-lived, as home values are expected to increase throughout the rest of 2021.