Zillow just came out with their ranking of the top 10 home sellers' and home buyers' markets across the country and the Chicago metro area showed up as the top buyers' market. Obviously Zillow has not been trying to buy a house in the Chicago area lately. Anyone who has can tell you it's not that easy - primarily because of lack of inventory - the real indicator of whether or not you have a buyers' or a sellers' market.
Zillow came to their conclusion by comparing largely meaningless data:
- Sale to list price ratio
- Percent of homes on the market with a price cut
- Number of days listings were on the market
Garbage in, garbage out.
Sale To List Price Ratio
This number is just as useless as it is when realtors use it to lie about their ability to sell your home. Like maybe it has something to do with how cheaply homes are priced to begin with? Furthermore, at 95.1%, it's not that low and it's actually at the higher end of the range of the past 4 years.
Percent Of Homes On The Market With A Price Cut
Again, this is another number that is heavily impacted by how high homes are listed to begin with. And, as you can see in the graph below, the percentage has actually been drifting down overall. Not terribly meaningful.
And the size of these price cuts is actually the lowest it's been in 3 years.
Let's face it, all this really proves is that, if anything, home sellers and their real estate agents are pricing homes more realistically these days.
Number Of Days Listings Were On The Market
Another meaningless number that really only reflects how realistically homes are being priced by sellers, this one is not graphed on the Zillow site for some reason. So I pulled the data myself for the Chicago metro area and, at 153 days for listings that actually sold, the market times are as low as they have been over the last 2 years.
The Real Indicator Of A Buyers' Market
If you really want a sense of whether or not it's a buyers' or sellers' market take a look at inventory levels - something that Zillow did not look at. As anyone who has been looking for a home lately can tell you there is a real shortage of good homes out there right now and the graph below confirms it. On a months of supply basis we are at the lowest level of the last 2 years with only 4.8 months of supply available. And that's pretty low on an absolute basis as well.
But I'm not about to call it a seller's market either because there is little evidence of rising prices yet but it's certainly not a buyer's market either.