Searching for OPPORTUNITY

Buyers and sellers naturally have different ideas about what constitutes an opportunity market. If you’re a buyer, you might say it’s a market where you have your pick of desirable properties and room to negotiate on price. If you’re a seller, you’re likely to say it’s all about price growth – but you also need to be able to find a replacement property.

Current market conditions have presented buyers and sellers with several conundrums this year. Demand has slowed in certain locations, yet supply is still low and prices are softening in some places. This unique set of circumstances has made it challenging to identify opportunities for individuals on both sides of the real estate transaction.

To help you find clarity and make sense of this year’s real estate paradoxes, we studied 125 major high-end residential markets across the United States to uncover the places that could present the most exciting buying and selling opportunities this spring.

Methodology

The Opportunity Index evaluates and ranks 125 U.S. markets based on buyer and seller opportunities. To determine the score for each type of opportunity, we chose to allocate rankings based on:

1. Sales Ratio for the last four months of 2022*

2. The median sale-price-to-list-price ratio (SP/LP%) for the last four months of 2022*

3. Inventory Growth over the last four months of 2022 compared to the first eight months of 2022

This ranking provided a score where the ceiling is 100.

* The Institute of Luxury Home Marketing analyzed the final four months of 2022 rather than annual data because the slowdown in first quarter 2022 from 2021’s all-time highs would have distorted the current market picture leading into the spring 2023 buying season.

WHAT’S A SELLER OPPORTUNITY?

Scores were awarded for opportunity where the market shows that it still favors the seller as demand is higher than supply, and sold prices are at or close to asking. In addition, we also looked at whether there has been an increase in inventory, allowing sellers to purchase a new home.

WHAT’S A BUYER OPPORTUNITY?

Scores were awarded for opportunity where the market shows that it favors buyers with higher supply than demand and sold prices are 5% to 10% below asking. Additionally, we looked for significant increases in inventory, giving buyers more listings to choose from.