The 5 Best Places To Sell A Home

The 5 best places to sell a home

Home sales are in a slump, but not everywhere. These five cities, because of lack of room to overbuild or a population influx, are still seller's markets.

By Matt Woolsey, Forbes.com

If you've got property for sale, chances are you're in a bind: Nationwide, prices for existing homes keep falling, and new homes started a few years ago continue to come on the market, increasing inventory.
On top of that, the fallout from subprime lending, the subsequent tightening of credit and lending standards and the recent rise in long-term Treasury yields have shrunk the pool of eligible buyers.
Yet, not every market follows national trends, and despite the industry's overall problems, there are still cities where sellers have the upper hand. The best way to judge a buyer's versus a seller's market is a simple supply-demand analysis of housing stock: At the current rate of sales, how long would it take to sell off the inventory of single-family homes or condos? If that measure comes back high, houses sit on the market longer. If it is low, the market is tightening, which is good news for the seller.
To measure inventory glut, we used Moody's Economy.com and National Association of Realtors data that tracked a market's current sales rate by projecting the amount of time it would take to sell off the excess housing stock at the current rate of sales. We also looked at the change in sales rate over the past year to measure the relative tightening or loosening of the market. Finally, a measure of price stability was applied so as to prevent the list from being a rundown of upstart markets.
The measurements left out a few cities that lacked comprehensive data. Seattle, for example, has incredibly strong market fundamentals -- the lowest vacancy rate of major metros at 0.9% and a small geographic area not conducive to overproduction. It is a good seller's market, but for tracking what we were after, Seattle data were incomplete for our analysis.
Moody's Economy.com chief economist Mark Zandi points out that the best-performing markets are those that had barriers to overproduction during the housing boom.
In the case of San Francisco, which ranked second on our list, it's an issue of geography: There is little space for growth or new development, and the local government doesn't do much to encourage new construction.
Strong in-migration stemming from local economic strength is another factor keeping demand high. New houses being built isn't a problem if new people are moving to town.

This scenario is playing out in Raleigh, N.C., the No. 1 city on our list. Moderate growth and disciplined building over the past five years prevented the market from developing a significant glut. Additionally, a strong local economy has helped contribute to the city's healthy 1.6% vacancy rate.
What's more, the rate of home sales against home inventory was healthy in Raleigh; in this category, it ranked fifth best of big cities, according to Moody's metrics. Even though the market has low vacancy to begin with and displayed strong construction restraint during the housing boom, Raleigh still has the eighth-best rate of tightening.

Similarly, strong in-migration and local economic pop make Austin, Texas, a seller's market. It finished fourth overall in sales rate to inventory size and has the fifth-best home-price appreciation figures of the large markets Moody's measured. Its mediocre 14th-best market-tightening ranking can be attributed, in large part, to its small inventory excess. Austin's vacancy rate is 1.5%, which is also where the national average stood during the most recent housing boom. In other words, that low a vacancy rate indicates a housing market at close to full capacity.
While the market isn't going gangbusters for investment, sellers in these markets are faring much better than their counterparts across the country.

Top cities for home sellers:
Raleigh, N.C.
San Francisco
Austin, Texas
San Antonio
St. Louis