established in 1999
If you're searching for property in Tampa, luck is on your side. Too many listed homes and not enough buyers means you've got the upper hand.
Want all-new appliances or $20,000 knocked off the asking price before you sign? Chances are, sellers there are willing to comply.
The same can be said for Minneapolis and Kansas City. All three, like Tampa, currently benefit buyers, thanks to an overabundance of supply and low sales rate.
The easiest way to judge our list is to examine the area's housing supply vs. demand. A good measurement? Take the current rate of sales and figure out how long it would take to burn off the excess inventory at that rate.
If that measure is low, houses are selling quickly. If it's high, houses are waiting on the market and ready to be bargained down.
To determine which of the country's real estate markets most benefit buyers, we looked at data from Moody's Economy.com and the National Association of Realtors. We tracked excess inventory and the change in sales rate over the last year to gauge the relative tightening or loosening of the market. Then a measure of price stability was applied to prevent the list from being a run-down of sinking ships.
What resulted were rankings that measure current housing markets relative to a completely in-balance market. New York's No. 9 spot doesn't mean you can expect to pick up a Fifth Avenue apartment at a rock-bottom price.
It means that based on the expansion of Gotham's housing stock, especially in the outlying metro area, there are a disproportionately high number of sellers for buyers, and as a result, properties are staying on the market longer. Prices then often drop. New York housing is never cheap, but at present buyers have more bargaining power than sellers.
This is especially evident in Tampa. Of American cities with over 500,000 in population, it is best for buyers. Florida in general has been going through a vast market correction due to overbuilding, as well as shifting insurance underwriting and lending conditions. Miami finished third, and if Sarasota, Palm Bay, Tallahassee or Pensacola had larger populations, they all would have made the top 10.
While the Tampa market has yet to bottom out, the silver lining for buyers is that it is a highly resilient market. Most of the fall-out in Tampa can be attributed to its high investor share, which is correctable given the city's good economic and job-growth projections.
Likewise, Chicago, at No. 5, has felt the effects of a housing supply growing in excess of demand. Brokers there say it's been a slow year thus far, and Moody's data supports that. Chicago ranked seventh worst for listings outpacing sales and fifth worst for the tightening rate of the market.
Milwaukee came in eighth due to moderate scores in sales-to-listings ratio. The city does, after all, have an extremely low vacancy rate of 1.1%, according to the U.S. Census Bureau. The Milwaukee market's future doesn't look quite as rosy, though. Its lack of an inventory has Moody's projecting a price trough for the city in the third quarter of 2008, but based on local economic and job creation problems, that recovery is only expected to be 0.4%-- an "L-shaped" recovery that doesn't rejuvenate the market.
For the overall state of the housing market, it is extremely important to see how much inventory these buyers' markets can burn off between now and October, when the market typically slows down. If sales don't pick up and work out inventory issues, expect to see significant price declines.