Sellers Outnumbering Buyers: The Aftermath of the Post-Recession Market Collapse
Purchasers of residential properties currently possess greater bargaining leverage than at any point since the housing market’s collapse following the Great Recession. In September, the United States housing market exhibited an estimated 62.6% surplus of home sellers relative to buyers, representing the most substantial disparity documented in records extending back to 2013.
This achievement constitutes the fourth consecutive month of record-setting figures, with the differential increasing considerably from 56.9% recorded in August. The Sun Belt region is propelling this pronounced buyer’s market phenomenon across the nation, characterized by substantial seller surpluses particularly evident in Miami, Nashville, TN, and several major metropolitan areas throughout Texas.
In circumstances where sellers exceed buyers in quantity, buyers generally possess enhanced negotiating leverage due to the availability of alternatives. Consequently, a market characterized by substantially more sellers than buyers is designated as a buyer’s market. A buyer’s market is formally defined as a market in which sellers outnumber buyers by more than 10%, whereas a seller’s market is defined as a market in which sellers fall short of buyers by more than 10%.
A market exhibiting a differential of plus or minus 10% is classified as a balanced market. Redfin determined the quantity of buyers by utilizing proprietary Redfin data regarding the average duration from a buyer’s initial property viewing to transaction completion, combined with MLS data encompassing active listings and pending transactions. The estimated quantity of sellers operating in the market corresponds to the total number of active listings recorded in the MLS. These estimations undergo seasonal adjustment and remain subject to modification.
Additional information regarding the detailed methodology is available here, and an interactive analytical dashboard can be accessed here. A buyer’s market designation applies exclusively to individuals possessing the financial capacity to purchase property. Elevated housing expenses and pervasive economic instability have prompted numerous prospective buyers to withdraw from market participation in recent years, resulting in the current disparity between buyer and seller populations.
“This is a buyer’s market born out of caution, not strength,” said Asad Khan, a Senior Economist at Redfin. “Buyers have tremendous negotiating power in most of the country because so many other would-be buyers have been priced out of the market, or scared off by economic uncertainty. For house hunters who have the budget and job security to purchase a home in today’s market, that creates a unique opportunity: They can be picky, negotiate and even walk away if the deal doesn’t make sense financially or they find something they like better. The irony is that in terms of supply, these are some of the best conditions for buyers in many years–but they have arrived at a time when costs are so high that fewer people can afford to take advantage of them.”
Disparities in This Economy
e disparity between purchasers and vendors expanded during September as purchasers demonstrated reduced market participation, whereas vendors maintained consistent market presence.
Nationwide, approximately 928,892 homebuyers participated in the market during September, representing the lowest figure in available records extending back to 2013. This figure reflects a 2.4% decrease from the preceding month, constituting the fifth consecutive monthly decline. Conversely, the market encompassed an estimated 1,510,784 home sellers, marking the highest volume since March 2020. This represents a 1.2% increase relative to the previous month.
The inventory of residential properties available for purchase is expanding primarily due to the accumulation of homes that remain unsold in the marketplace. This growing inventory creates an expanding collection of available listings, which continues to increase as additional properties are introduced each month. Despite experiencing a decline in buyer demand, homeowners have persisted in listing their properties because numerous sellers have abandoned their previous strategy of waiting.
Following extended periods of anticipation that interest rates would decrease or market conditions would improve, certain sellers perceive minimal advantage in continuing to delay, particularly given that property valuations remain sufficiently high to permit profitable transactions. Certain homeowners are opting to sell at the present time due to apprehension that property values may decline if they postpone their sale. Others are placing their homes on the market due to compelling circumstances: employment relocation, family expansion, marital dissolution, or transition into retirement, among other factors.
However, it is important to recognize that numerous homeowners without an urgent need to relocate may elect not to list their properties or may withdraw their homes from active listings: Many possess considerable equity in their properties, and the relatively robust employment market typically creates minimal incentive to sell.
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