Yahoo Finance I’m a Real Estate Agent: Here Are 5 Cities Where You Should Avoid Buying a Home This Winter
The housing market has faced some difficult conditions lately. While prices continue to trend upward, high mortgage rates are pricing out many buyers, and relatively low inventory is creating supply/demand imbalances in many markets.
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“Across the U.S., prospective homebuyers are grappling with the persistent challenges of affordability and constrained inventory. This issue has been exacerbated by interest rates hovering around 8%,” says Cody Horvat, licensed real estate broker at The Scott Group, a division of Compass.
Amidst these circumstances, the number of homes sold has fallen by 17% year over year, and the number of homes listed has dropped by 16% nationally, according to Redfin. That’s not to say that buyers and sellers are having trouble coming together in every local real estate market, but the macroeconomic factors are typically constraining.
And in some cities, the conditions are even less in favor of buyers.
“There are many factors that a buyer should look at, but price increases and inventory are some of the key metrics that buyers are going to be feeling when purchasing a home. Another key indicator regarding the health of a market is how quickly homes in any given area are selling,” says Horvat.
“If homes are selling rapidly, you know you are in a good spot with lots of demand. On the other hand, if homes are sitting on the market, it may indicate that it’s not a great area to buy in because you probably aren’t going to see as much home value appreciation — the demand just isn’t there,” he explains.
That said, if you’re looking to avoid getting into a bidding war and can be patient with your purchase, you might prefer to look for a less competitive market.
“If you are a buyer who has been outbid on multiple properties and your offers just aren’t getting accepted, looking for a home in an area where sales are moving more slowly may be in your best interest,” says Horvat.
With that in mind, if you’re looking to buy a home this winter, you may want to avoid buying in these five cities where the conditions are tough for buyers, based on realtor.com data analyzed by Horvat.
San Diego, California
While San Diego is often a beautiful place to live, the real estate market might not look too appealing to buyers this winter. Home prices have surged by 18% year over year in San Diego, said Horvat. “Meanwhile, housing inventory has dwindled by 37%,” he added.
Low inventory could continue to push up prices at a time when borrowing money via a mortgage is more expensive.
Oxnard, California
Similar to what’s happening in San Diego, another coastal city in California is also facing rising prices amidst low inventory. In Oxnard, home prices have gone up by 24% over the past year, while housing inventory has dropped by 36%, notes Horvat.
So, even though prices in Oxnard are generally more affordable than several other oceanfront cities in California, the conditions aren’t necessarily ripe for buyers this winter.
Bridgeport, Connecticut
On the other side of the country, Bridgeport, CT, is also experiencing these types of conditions. In this largest city in Connecticut, home prices have gone up by 16%, while inventory has fallen by 31% year over year, notes Horvat.
Norwich, Connecticut
The real estate market in Norwich, CT has followed a similar path to Bridgeport, proving that even relatively small cities can face challenges that resemble those of larger ones. In Norwich, prices have jumped 12%, while inventory has declined by 30% year over year, says Horvat.
In winter, real estate inventory nationally tends to be even lower. So, you might not want to be shopping for a home in either of these Connecticut cities over the coming months.
Las Vegas, Nevada
Lastly, the weather might be better in winter in Las Vegas than it is in Connecticut, but the real estate market might not be all that hot for buyers.
“Home prices there have nudged up by a modest 4%, but here’s the kicker: there’s a whopping 55% fewer homes for sale compared to last year,” said Horvat.
All five of these cities share the commonality of falling inventory, which can make it harder for buyers to score good deals. “So, if you’re eyeing a home in one of these spots, you might want to sit on the sidelines until spring when new inventory tends to hit the market in a rush,” said Horvat.
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This article originally appeared on GOBankingRates.com: I’m a Real Estate Agent: Here Are 5 Cities Where You Should Avoid Buying a Home This Winter
