Buying a house in 2018 has become steadily more intricate with consistent declines in availability and continued price increases, according to an analysis by Realtor.com that identified a shift in buyer activity. The report analyzed thousands of views to Realtor.com’s website covering the 100 largest metropolitan areas in the fourth quarter of 2017 compared to 2016 and identified a major trend: affordability and availability over location.
The analysis primarily focused on a metro’s inbound to outbound ratio, which was defined as the ratio of views to that metro from other metros with notable interest from more expensive markets to less expensive nearby markets.
The report found shifting interests included demands for properties in smaller cities such as Bakersfield and Fresno as compared to their more expensive Californian counterparts such as San Francisco, Los Angeles, and Sacramento.
On average the metropolitan areas with the most inbound views had a median listing price of $291,000 compared to the $521,000 of areas such as San Francisco, New York, Washington, D.C., and Seattle.
Home buyers instead focused their searches on more affordable locations outside of major metropolitan areas where markets with the highest overall interest were more affordable, had higher expected employment growth, and more available inventory than the markets they receive their inbound views from, the report noted.
Another contributing factor in this shift was the significantly lower inventory available for buyers in these major metros.
“This low inventory availability, coupled with unaffordability and only average employment performance, could explain why these markets are seeing a lower ratio of inbound views to outbound views,” said Sabrina Speianu, Economic Research Analysist for Realtor.com and the writer of this report. “The markets with the highest overall inbound to outbound ratios are more affordable, have higher expected employment growth, and more available inventory than the markets they receive their inbound views from.”