The Federal Reserve’s half-point rate cut in September brought relief and optimism to some prospective homebuyers. Still, with another potential rate cut coming as early as November or December, many buyers opt to hold off on their purchasing plans until then. While waiting for lower mortgage rates can be beneficial, it can also encourage a surge in housing demand, making the market more competitive and potentially more expensive.
So, where are the most buyer-friendly market conditions for those who would like to get into the market ahead of the expected demand surge? To find out, Zoocasa analyzed market competition across the U.S. by comparing sales and new listings data for September 2024 in 50 cities. This data was then used to determine the sales-to-new-listings ratio (SNLR), calculated by dividing the total sales number by the number of new listings in each city.
The SNLR can be broken down into three percentage parameters:
- An SNLR under 40% suggests a buyer’s market: where new listings outweigh and buyers have more options
- An SNLR between 40% and 60% is a balanced market: where demand and supply are balanced
- An SNLR over 60% means a seller’s market: where demand outpaces supply, benefiting sellers
35 out of 50 Markets Are Currently Favoring Sellers
Among the 50 analyzed markets, 35 have an SNLR above 60%, indicating that demand outpaces supply. This suggests the market favors sellers because supply cannot keep up with demand, resulting in increased competition as buyers have fewer choices.
In cities like Indianapolis, Baton Rouge, and Columbus, where the SNLR is above 80%, the lack of supply may be felt more strongly. In Indianapolis and Baton Rouge, the SNLR has increased since last year, making the market noticeably tighter.
However, this is not the case for most cities. Despite many still being classified as sellers’ markets, the majority of markets are balancing out with less competitive conditions. Rochester, Colorado Springs, Albuquerque, Tucson, Charlotte, Boston, and Buffalo have all experienced drops of over 10 percentage points in their SNLRs.
Buffalo has experienced the most dramatic shift among those currently classified as a seller’s market In September 2023, Buffalo had an extremely high SNLR of 87%, but in September 2024, the SNLR decreased by 22 percentage points to 65%. Buyers in Buffalo will find that conditions have improved in their favor, with new listings getting closer to meeting demand.
Conversely, New Orleans has experienced the largest SNLR increase, from 49% in 2023 to 68% in 2024. Cincinnati has also become a tighter market from last year, with the SNLR increasing from 66% in 2023 to 76% in 2024. Buyers in these markets should be prepared to move quickly, make strong offers, and be flexible with conditions to increase their chances of a successful purchase in a competitive market.
While it may be more challenging to buy in a market with a higher SNLR, it could also be a strategic move. Cities with high SNLRs typically experience strong demand, which helps keep prices elevated. This means homes in these markets may have a higher likelihood of appreciating more quickly.
The Most Buyer-Friendly Markets in Fall 2024
Competition is cooling off this fall in many Northeastern markets such as Boston, Jersey City-Hoboken, Newark, and Albany. All four markets are currently balanced, meaning the supply level meets the demand. In a balanced market, both buyers and sellers benefit from stable conditions, providing buyers with a good range of options and giving sellers a healthy level of demand.
These balanced conditions are especially advantageous for New Jersey buyers in Hudson and Essex Counties, where competition has dropped significantly from 2023—by 32% and 22%, respectively.
Compared to last year, market conditions are also notably more balanced in Jacksonville, Miami, Atlanta, Seattle, and Tucson. Among these, Tucson has the lowest SNLR at 48% while Miami, Jacksonville, and Atlanta’s SNLRs currently sit at 55%. If you’ve been sitting on the sidelines waiting to purchase in one of these cities, now may be an opportune time.
However, only one market on our list is currently favoring buyers: Washington, DC. Washington, DC has a low SNLR of 37%, indicating that the amount of inventory outweighs demand. In a buyer’s market, buyers can browse more leisurely and have greater negotiating power, often allowing them to secure homes at more favorable prices and with conditions that suit their needs.
If you’re considering buying or selling and want to learn more about prices and sales activity in your local market, our qualified agents are here to help you! Give us a call today to learn more.
