In the world of real estate, the term “buyer’s market” describes a local or regional market in which the supply of housing outweighs the demand for housing. Buyer’s markets are marked by factors such as relatively affordable prices, negative gaps between asking prices and selling prices, and a generally slow pace of home sales. Some definitions stretch to include factors like low property taxes and a high prevalence of single-family homes.
These conditions are great for patient buyers who seek long-term investment opportunities and those who just want to upgrade to a better home at a reasonable price. Fortunately, amid the COVID-19 pandemic and its economic fallout, sellers benefit from rock-bottom mortgage rates that have drawn once-reluctant buyers off the sidelines.
Since they feature low prices and ample supply, buyer’s markets are particularly attractive for first-time homebuyers. And thanks to online data aggregators such as Trulia, Redfin, and Zillow, identifying and capitalizing on buyer’s markets is easier now than ever before.
Criteria That Affect Housing Affordability
Real estate professionals use a variety of metrics to classify buyer’s markets. Each figure tells prospective buyers something about the overall strength and affordability of a given real estate market.
- Median Home Price. The median price for homes sold within the metro area determines whether homeownership is affordable for middle-class homebuyers.
- Selling Price Discount to List Price. When homes sell at a premium to their asking prices, it suggests that demand outpaces supply in the market. In true buyer’s markets, homes usually sell for less than their asking prices. In the list below, areas where homes sell at a discount are noted by a “-” symbol, followed by a percentage. Areas where homes sell for a premium to their list prices are noted by a “+” symbol, followed by a percentage.
- One-Year Change. The change in median home prices over the preceding 12 months is a good indicator of the market’s overall price momentum. Rapidly appreciating prices indicate a buyer’s market may soon be ending. Falling prices may indicate an ongoing buyer’s market. You can avoid getting stuck in a falling market by looking at the overall one-, three-, and five-year price trends. When the rate at which prices have fallen appears to be slowing, you can be more confident you’re getting in near the bottom of the market.
- Three-Year Change. This figure measures price momentum over a longer period of time and hints at the overall strength of a buyer’s market. Since the national home-price average has risen slightly over the past three years, markets that post a drop may be undervalued – and, therefore, may be good candidates for opportunistic buyers.
- Five-Year Change. This longer-term metric shows how home prices have fared since the depths of the financial crisis and recession. While most buyer’s markets have posted price drops during this period, markets with especially large drops may have structural or economic issues that could get in the way of any price recovery. Be wary of such markets.
- Average Time on Market. This represents the average amount of time that elapses between a home’s listing date and closing date in each market. Lower figures indicate elevated demand for homes. Buyer’s markets tend to have larger time-on-market figures. (This data may not be available for some of the smaller cities on the list.)
- Local Unemployment Rate. The unemployment rate is a good indicator of a metro area’s potential for job growth and overall economic health. Economically strong regions with elevated housing supply figures, slow sales rates, and falling prices may soon turn the corner, creating lucrative opportunities for homebuyers who time their purchases just right. (This data is sourced from the U.S. Bureau of Labor Statistics.)
Unless otherwise noted, statistics are current to the first quarter of 2021 or the fourth quarter of 2020. All home pricing and sales data are courtesy of Redfin, Roofstock, and Zillow.
Best Cities to Buy a Home in America
Here are 10 American housing markets, scattered about every region of the country, that are affordable and accessible by any measure. These metro markets have reasonable prices relative to national and regional averages, ample supplies of attractive homes, and good prospects for further price appreciation. They should be at the top of every bargain-seeking homebuyer’s list.
1. Cleveland, Ohio (Cleveland-Elyria-Mentor, OH)
- Median Home Price: $105,000 (Cleveland proper)
- Selling Price Discount/Premium to List Price: -2.5%
- One-Year Change: +29.6%
- Three-Year Change: +60.8%
- Five-Year Change: +163%
- Average Time on Market: 36 days
- Local Unemployment Rate: 5.6%
Even after decades of neglect, Cleveland proper and its inner-ring streetcar suburbs are awash in vintage homes dating back to the first three decades of the 20th century. Many need nothing more than a fresh coat of paint and some modern finishes.
Although Northeast Ohio is dominated by heavy industry, Cleveland isn’t quite as one-note as, say, nearby Canton, the long-faded automotive rubber capital. Thanks in large part to the presence of the Cleveland Clinic, the city’s largest private employer, it’s a world-class health care hub. Together with Case Western Reserve University and University Hospitals of Cleveland, the Cleveland Clinic is a nexus for biotechnology research. NASA even has a research facility here: the Glenn Research Center, named for native Ohioan John Glenn.
2. Toledo, Ohio
- Median Sale Price: $120,000
- Selling Price Discount/Premium to List Price: -3%
- One-Year Change: +14%
- Three-Year Change: +27.4%
- Five-Year Change: +42.6%
- Average Time on Market: 98 days
- Local Unemployment Rate: 5.6%
While Toledo’s post-industrial economy is subdued, nearby communities have added thousands of decent-paying jobs over the past decade. And bargain-basement land and housing prices are proving to be irresistible for real estate investors and urban pioneers who know a good deal when they see one.
Sheer affordability is what stands out the most about Toledo’s housing market. The Toledo area is home to nearly a million people, but the city’s median housing costs remain shockingly low. However, local home prices are rising quickly, so there may not be much time left for buyers to get in on its once-in-a-generation deals.
For experienced real estate investors, plentiful fixer-upper homes beckon, many dating back to the 1910s and 1920s.
3. Philadelphia, Pennsylvania (Philadelphia-Camden-Wilmington, PA-NJ-DE-MD)
- Median Sale Price: $242,000 (Philadelphia proper)
- Selling Price Discount/Premium to List Price: -2.3%
- One-Year Change: +16.5%
- Three-Year Change: +29%
- Five-Year Change: +61.3%
- Average Time on Market: 36
- Local Unemployment Rate: 7.1%
Philadelphia is the United States’ sixth-largest city and one of its most popular tourist destinations. Among major northeastern cities, it’s by far the best value for homebuyers – you’ll get far more house for your money here than in nearby Washington, D.C., or New York City.
Traffic is rough here, but the public transit system provides decent coverage well out into the suburbs. If you plan to work in central Philly, there’s a good chance you’ll take the train or bus to work.
Speaking of work: It’s not difficult to find in Philly, thanks to a solid, diversified regional employment base and a lively tech scene. Plus, New York City is only 90 miles away by train, and thousands of Philly-area residents make that commute. The comparably low cost of housing in Philly justify the fuel or train bill.
Closer to home, Philly and nearby suburbs have a mind-boggling array of charming 19th- and early-20th-century rowhouses and detached homes just begging for new owners’ sweat equity.
4. Miami, Florida (Miami-Fort Lauderdale-Pompano Beach, FL)
- Median Sale Price: $365,000 (Miami proper)
- Selling Price Discount/Premium to List Price: -3.7%
- One-Year Change: +10.5%
- Three-Year Change: +13.2%
- Five-Year Change: +29.5%
- Average Time on Market: 60 days
- Local Unemployment Rate: 7.4%
Geographically, Miami lies at the continental United States’ southeasternmost extent. Culturally, it’s all Caribbean. Endless beaches, waving palms, pastels, cubanos and ropa vieja galore, and not a hint of frost – no wonder people keep flocking to South Florida in good times and bad. After a dramatic pre-recession crash and years of anemic recovery, Miami is clearly on the upswing.
Does that mean prospective buyers should wait the hot streak out? That’s not clear. Miami’s housing inventory remains elevated, an artifact of the overbuilding boom of the mid-2000s, and properties tend to linger on the market. As long as you’re not set on a coastal condo, you’ll find a place that fits your budget here.
5. Rockford, Illinois
- Median Sale Price: $114,000 (Rockford proper)
- Selling Price Discount/Premium to List Price: -2.6%
- One-Year Change: +10.6%
- Three-Year Change: +42.2%
- Five-Year Change: +107.1%
- Average Time on Market: 12
- Local Unemployment Rate: 6.6%
Rockford is located less than 100 miles from downtown Chicago, but it bears little resemblance to the Windy City. Rockford is a growing hub for the insurance industry and has had some success in attracting high-tech manufacturers. Two of the Midwest’s busiest interstates meet here, so the city is also a noteworthy trucking hub.
Rockford’s housing market has recovered nicely from the late-2000s recession. Homeowners who bought at what turned out to be the market’s rock bottom in 2013 and 2014 have seen their investments appreciate by upward of 100%, on average. Given that prices here are far lower than the national average, it stands to reason prices could continue to rise.
6. Tulsa, Oklahoma
- Median Sale Price: $192,000
- Selling Price Discount/Premium to List Price: -1.5%
- One-Year Change: +13%
- Three-Year Change: +24.5%
- Five-Year Change: +53.6%
- Average Time on Market: 17 days
- Local Unemployment Rate: 6.6%
Tulsa has a strong economy that shows no signs of slowing down. Dozens of energy firms have headquarters or branch offices here, so the city has benefited greatly from the ongoing shale gas boom. Tulsa’s location near one of the world’s largest energy terminals at Cushing, Oklahoma, helps too.
Meanwhile, the city is a jumping-off point for tourists looking to escape to the Ouachita Mountains and the nearby lake district of northeastern Oklahoma and southwestern Missouri. Both regions offer amazing recreation opportunities, including a world-class long-distance hiking trail.
While opportunistic buyers might be wary of a market that has posted strong price increases during each of the past five years, Tulsa remains incredibly affordable by national standards. If history is a guide, that’s not likely to change anytime soon.
7. Hartford, Connecticut (Hartford-West Hartford-East Hartford, CT)
- Median Sale Price: $204,000 (Hartford proper)
- Selling Price Discount/Premium to List Price: -1.6%
- One-Year Change: +13.4%
- Three-Year Change: +51.1%
- Five-Year Change: +58.1%
- Average Time on Market: 65 days
- Local Unemployment Rate: 7.3%
Located near the geographical center of Connecticut, Hartford is a hub for the global insurance industry. It’s home to a sizable aerospace cluster (anchored by Raytheon Technologies, which has a major presence in nearby Farmington), and a state capital to boot.
The city’s relatively diverse economic base keeps it in better shape than other rusting New England factory towns. In central-city neighborhoods, much of the housing stock dates to the late 19th and early 20th century – catnip for DIYers who know what they’re doing. Elevated property values in newer, perennially desirable suburbs like Farmington, Bloomfield, and Vernon help boost the metro average.
Hartford is one of the only metros on this list not to see significant price appreciation during the past five years, making it a compelling choice for value-hunting homebuyers. The roughly equal-sized cities of New Haven (home to Yale University) and Springfield, Massachusetts, lie well within Hartford’s commuter belt – all the more reason to set up shop in this still-affordable pocket of New England.
8. Spokane, Washington (Spokane-Spokane Valley, WA)
- Median Sale Price: $309,000 (Spokane proper)
- Selling Price Discount/Premium to List Price: +1.6%
- One-Year Change: +26.1%
- Three-Year Change: +63.4%
- Five-Year Change: +90.4%
- Average Time on Market: 6 days
- Local Unemployment Rate: 6.8%
Founded on a dramatic cataract that’s now the centerpiece of a beautiful city park, Spokane is the economic and political hub of Washington State’s eastern two-thirds. Despite an impressive run since the late-2000s housing bust, median home prices here remain very affordable, and buyers can expect substantial discounts to list price. The relatively low average time-on-market suggests inventory is tight, but the region’s above-average unemployment rate may keep exuberance in check.
A stable, growing base of health care companies, universities, and high-tech manufacturers invest heavily in Spokane’s community. Washington doesn’t tax personal income, and nearby Idaho has a famously lenient corporate tax, so many workers live in Washington and commute to well-paying jobs in Idaho.
9. Virginia Beach, Virginia (Virginia Beach-Norfolk-Newport News, VA-NC)
- Median Sale Price: $290,000
- Selling Price Discount/Premium to List Price: 0%
- One-Year Change: +8.2%
- Three-Year Change: +17.7%
- Five-Year Change: +21.8%
- Average Time on Market: 24 days
- Local Unemployment Rate: 5.2%
With 35 miles of continuous beach supporting hundreds of oceanside hotels and condos available for short-term rental, Virginia Beach is a wildly popular destination for city slickers escaping the interior Southeast’s relentless summer humidity.
It’s also within commuting distance of Naval Station Norfolk, one of the U.S. military’s most important installations. At least a dozen more military outposts call Hampton Roads home, serving as a critical stabilizer for the local economy – more than 50,000 civilians support military operations here. Major nonmilitary sources of employment revolve around transportation. Norfolk Southern is based here, as is the world’s largest shipyard, operated by Newport News-based Huntington Ingalls Industries.
Housing-wise, Virginia Beach’s best bargains are found away from the coastline, amid the city’s dozens of square miles of suburban tract housing and low-rise condo and townhome complexes. Though you’d never know it from the congested beachfront, much of the city of Virginia Beach is undeveloped. As new housing on the city’s western and southern fringes increases supply, prices may remain in check. That’s great news for bargain hunters.
10. Albuquerque, New Mexico
- Median List Price: $250,000
- Selling Price Discount/Premium to List Price: -0.5%
- One-Year Change: +16.3%
- Three-Year Change: +27.3%
- Five-Year Change: +34.5%
- Average Time on Market: 17 days
- Local Unemployment Rate: 6.8%
Albuquerque offers a solid sale price discount and steadily appreciating list prices. A high foreclosure rate sweetens the deal for buyers who want to fix and sell.
Outside of its southeastern oil patch, New Mexico’s rural economy seems locked in perennial decline. In Albuquerque, though, things are looking better than they have in a long time. The University of New Mexico and several major health care companies support a booming knowledge economy, and the city’s beautiful surroundings and unique culture make it an increasingly popular tourist destination.
Of course, housing market affordability isn’t the only factor that should inform your next move. Good schools, vibrant culture, ample lifestyle amenities, and strong job prospects are all critical elements of any moving decision.
Buyer’s markets don’t last forever, so if you’re thinking of investigating these particular ones, do so before they disappear. And be sure not to limit your search to only these places. Buyer’s markets can be found across the United States, from big Texas cities like Dallas, Austin, and Houston to the surprisingly affordable fringes of Atlanta, Los Angeles, and San Diego.