Chicago Named Strongest Buyer’s Market in the Country

According to data recently released by Zillow, Chicago was the best buyer’s market in the United States in the third and fourth quarters of 2012.  Zillow studied 142 metro areas across the country, and found that buyers in Chicago have far stronger bargaining positions than sellers do.  Cleveland came in second place, and the top five were rounded out by by Philadelphia, Cincinnati, and New York City.

The top three seller’s markets, meaning metro areas in which the sellers had greater bargaining power than the buyers, were all in California:  San Jose, San Francisco, and Sacramento.  The top five were rounded out by Las Vegas and Phoenix.

The formula Zillow used to determine the best markets had three components:  1) A comparison of how much a house sells for as compared to its last listed price; 2) the amount of time a house stays on the market; and 3) the percentage of homes in any metropolitan area that have had at least one price reduction. Chicago is the strongest buyer’s market because in order to sell their homes, sellers are not only having to reduce prices more often than sellers in other metro areas, their homes are on the market longer, and the final price they accept is a smaller percentage of the asking price than the prices accepted in other metropolitan areas.

What does this mean for you?  Well, if you’re looking to buy, according to Zillow, it’s a great time to do it.  On the other hand, if you’re looking to sell, you have a lot of competition out there!