Seller's Markets - U.S. Markets with Under 5 Months of Inventory

Seller's Markets - U.S. Markets with Under 5 Months of Inventory

Some U.S. real estate markets remain strong seller's markets with under 5 months of inventory in 2026. Complete data on Northeast, Midwest, California, and hot markets with competitive conditions, pricing trends, and strategic insights for buyers and sellers.

Where Sellers Still Hold the Power

While headlines focus on emerging buyer's markets in the Sun Belt, a significant portion of the United States remains firmly in seller's market territory as we move through 2026. These markets—predominantly concentrated in the Northeast, Midwest, and select coastal markets—continue to experience inventory shortages, competitive bidding, and strong price appreciation that favor sellers.

As of early 2026, dozens of major U.S. markets maintain less than 5 months of inventory, with some extraordinary markets showing less than 1 month of available supply. This persistent scarcity creates conditions where sellers command premium prices, buyers compete intensely, and homes sell rapidly—sometimes within days of listing.

Key Findings:

- National inventory stands at 3.3-4.6 months (December 2025 data shows 3.3 months, trending toward 4.6 months by January 2026)
- San Francisco leads with just 0.5 months of single-family home inventory—the most extreme seller's market in the nation
- Bloomington-Normal, Illinois shows 0.4 months of supply—the lowest inventory among all tracked markets
- Northeast and Midwest markets dominate seller's market conditions, with inventory 46% below pre-pandemic levels
- Multiple markets show under 2 months of inventory, creating hyper-competitive conditions
- Price appreciation in seller's markets ranges from 3-9% year-over-year, vastly outperforming national averages
- Days on market in strong seller's markets average 15-36 days, compared to 60-100+ days in buyer's markets

Understanding Seller's Market Dynamics

What Defines a Seller's Market?

A seller's market exists when housing demand significantly exceeds supply, giving sellers pricing power and negotiating leverage over buyers. This occurs when months of inventory falls below 5-6 months, with particularly strong seller's markets showing under 3 months of supply.

Seller's Market Classification:

Months of InventoryMarket ClassificationSeller AdvantagesBuyer Challenges0-1 monthsExtreme Seller's MarketMaximum pricing power, multiple offers guaranteed, sell significantly over ask, instant salesSevere competition, waived contingencies common, bidding wars standard, minimal selection1-2 monthsVery Strong Seller's MarketStrong pricing power, frequent multiple offers, sell over ask, quick sales (under 30 days)Heavy competition, limited negotiating power, need pre-approval, fast decisions required2-3 monthsStrong Seller's MarketGood pricing power, occasional multiple offers, sell at or above ask, relatively quick salesModerate competition, minimal negotiating room, thorough preparation needed3-5 monthsSeller's MarketPricing leverage maintained, competitive conditions, sell near ask price, steady sales paceSome competition, limited negotiating power, good properties move quickly5-6 monthsBalanced MarketNeutral conditions, fair negotiation for both parties, market-rate pricingReasonable selection, fair negotiating position, time for decisions

The critical threshold: When inventory drops below 3 months, seller's market conditions intensify dramatically, with buyers facing serious competition and sellers achieving premium pricing.

National Seller's Market Overview: 2026 Landscape

National Inventory Status

U.S. Housing Market Metrics - January 2026

MetricCurrent ValueMarket ContextSeller/Buyer AdvantageNational Months of Supply3.3-4.6 monthsSeller's/Approaching BalancedSellers maintain advantageActive Listings~912,696Still 17.8% below 2019 levelsSellers benefit from scarcityMedian Days on Market91 days nationallyVaries dramatically by regionRegional advantage variesMedian List Price$419,950Nearly flat YoYPrice stability favors sellersHomes Selling Over Ask25% nationallyDown from peak but significantSellers in hot markets get premiumAverage 30-Year Mortgage Rate6.15-6.25%Elevated but decliningConstrains buyer demand

Regional Disparity:

The national average of 3.3-4.6 months masks extreme regional variation:

- Northeast/Midwest: Many markets under 3 months (strong seller's markets)
- California Coastal: Under 2 months in premium markets (very strong seller's)
- Sun Belt: 6-10 months in correcting markets (buyer's markets)
- Mountain West: Mixed conditions (3-7 months depending on location)
Why Seller's Markets Persist

Primary Factors Supporting Seller's Market Conditions:

1. Chronic Underbuilding in Northeast/Midwest

Unlike Sun Belt markets that experienced building booms, Northeast and Midwest markets severely underbuilt during the 2020-2025 period:

RegionNew Construction Share of ListingsNational AveragePrice Premium for New BuildsNortheast/Midwest (avg)8-12%16.7%50-137%Rochester, NYVery low16.7%137% premiumHartford, CTVery low16.7%75-100% premiumSun Belt (comparison)20-25.7%10-15% premium

Result: Limited new construction means buyers compete for scarce existing inventory, pushing prices higher.

2. Mortgage Rate Lock-In Effect

Many current homeowners have mortgages with rates under 4%:

Lock-In Impact Analysis:

Current Mortgage RateRate on Existing MortgageMonthly Payment Increase on $400k HomeDisincentive to Sell3.5% (2020-2021)6.25% (current)+$775/month (+46%)Extreme4.0% (2019-2021)6.25% (current)+$662/month (+38%)Very High4.5% (2021-2022)6.25% (current)+$548/month (+30%)High

Impact: Homeowners are reluctant to list and lose favorable rates, suppressing inventory in all markets but especially in traditionally stable Northeast/Midwest regions where owners tend to stay longer.

3. Strong Local Economies

Northeast/Midwest Economic Strengths:

- Technology hubs: Boston, New York, Chicago support high-income employment
- Healthcare/education: Major medical centers and universities provide stable jobs
- Manufacturing renaissance: Reshoring and advanced manufacturing growth
- Financial services: Major banking and finance centers
- Government: State capitals and federal government presence

These economic drivers support sustained housing demand even with higher mortgage rates.

4. Geographic and Zoning Constraints

Northeast/Midwest Building Limitations:

- Limited developable land: Dense existing development, environmental constraints
- Restrictive zoning: Strong NIMBY movements, historic preservation
- Infrastructure costs: Expensive to extend utilities and services
- Climate challenges: Shorter building seasons, weather-related delays
- Regulatory hurdles: Complex permitting, environmental reviews

Result: Even when demand exists, supply cannot easily respond, perpetuating scarcity.

5. Migration Patterns Favoring Select Markets

While Sun Belt migration has slowed, Northeast/Midwest markets benefit from different migration streams:

- Return migration: Remote workers returning to family/roots
- Refugee markets: Buyers priced out of NYC/Boston moving to Hartford/Rochester/Providence
- International immigration: Gateway cities receiving new arrivals
- College town retention: University towns keeping graduates

Markets Currently in Strong Seller's Territory (Under 5 Months Inventory)

Extreme Seller's Markets (Under 1 Month Inventory)

The most competitive real estate markets in America show inventory levels that create unprecedented seller leverage:

Extreme Seller's Markets - Under 1 Month Supply

MarketMonths of InventoryProperty TypeMedian PriceYoY Price ChangeDays on MarketMarket DynamicsBloomington-Normal, IL0.4 monthsSingle-Family$——Under 20 days (est.)Hottest market nationallySan Francisco, CA0.5 monthsSingle-Family$1,662,000+8.63%15 daysExtreme scarcity, selling 13% over ask

San Francisco: America's Most Extreme Seller's Market

San Francisco represents the most seller-favorable major market in the United States:

San Francisco Market Metrics - January 2026

MetricSingle-Family HomesCondominiumsMarket ImpactMonths of Supply0.5 months1.2 monthsExtreme seller's marketTotal Active Listings93 homesLow hundredsHistoric scarcityYear-Over-Year Inventory Change-43.64%DecliningWorsening shortageMedian Sale Price$1,662,000$1,075,000Premium marketYoY Price Appreciation+8.63%+5.21%Strong growthAverage Days on Market15 days50 daysLightning-fast salesSale-to-List Price Ratio113%98%Selling 13% over ask

San Francisco Market Dynamics:

Seller Advantages:

- Just 93 single-family homes for entire city creates desperation buying
- 15-day average sale time means instant transactions
- Selling 13% over asking price on single-family homes is standard
- Year-over-year inventory decline of 43.64% means worsening conditions for buyers
- No indication of relief - inventory continues falling

Buyer Challenges:

- Severe time pressure: Must decide within days or lose opportunity
- Waived contingencies standard: Inspection, financing, appraisal waivers common
- Escalation clauses required: Need to bid significantly over ask to compete
- All-cash offers preferred: Sellers favor certainty of cash
- Minimal selection: Fewer than 100 homes to choose from citywide

Why San Francisco Is So Tight:

- Geographic constraints: Peninsula location limits expansion
- Prop 13 tax incentives: Owners benefit from staying, disincentivizing sales
- Tech wealth: High-income buyers can afford premium prices
- Regulatory barriers: Extremely difficult to build new housing
- International demand: Foreign buyers compete for limited stock

Forecast: San Francisco likely to remain under 1 month of supply through 2026, with no significant relief anticipated.

Bloomington-Normal, Illinois: The Hottest Small Market

This college town (home to Illinois State University and Illinois Wesleyan University) shows the lowest inventory in HousingWire's national tracking:

Market Characteristics:

- 0.4 months of supply = extreme scarcity
- University-driven demand: Students, faculty, staff housing needs
- Limited buildable land: Developed areas constrain expansion
- Strong rental market: Investment properties compete with owner-occupants
- Days on market: Estimated under 20 days for desirable properties

Investment Appeal: Despite tight inventory, prices remain affordable compared to coastal markets, creating opportunity for investors who can act quickly.

Very Strong Seller's Markets (1-2 Months Inventory)

Markets with 1.0-2.0 Months Supply

Market AreaMonths of InventoryMedian PriceYoY Price ChangeDays on MarketKey CharacteristicsPearl City-Aiea, HI (homes)1.6 months$1,062,5000 daysOahu suburb, stable pricingManoa, HI (homes)1.8 months$1,637,500-3 daysPremium Honolulu neighborhoodDayton, OH1.8 months$——Under 30 daysTight Midwest marketToledo, OH2.0 months$——Under 30 daysStrong Ohio seller's marketEwa, HI (homes)1.8 months$930,000+4 daysWest Oahu growth areaKaimuki, HI (homes)2.4 months$1,246,500-4 daysHonolulu neighborhood

Oahu, Hawaii: Multiple Very Strong Seller's Markets

While some Oahu markets show buyer's conditions (6+ months for condos, North Shore), numerous Oahu single-family neighborhoods remain extremely tight:

Oahu Strong Seller's Markets Analysis:

Pearl City-Aiea (1.6 months):

- Fastest sales on Oahu: 14-day median time to sale
- Bid-up percentage: 33.5% of sales go over asking
- Inventory constraint: Just 27 active listings (-25% YoY)
- Price stability: Median unchanged at $1.06M despite tight market
- Seller power: Multiple offers common, buyers waive contingencies

Manoa (1.8 months):

- Premium location: Near University of Hawaii, lush valley setting
- Lightning sales: 14 days median on market
- High bid-up rate: 32.4% selling over ask (+35% YoY increase)
- Extreme scarcity: Only 10 active homes (-50% YoY)
- Price pressure: Despite -3% YoY, tight inventory supports values

Kaimuki (2.4 months):

- Urban Honolulu: Desirable hillside neighborhood
- Rapid turnover: 15 days to sale
- Strong competition: 29.6% bid-up percentage
- Limited inventory: 31 active listings (-6% YoY)
- Price resilience: -4% YoY but monthly showing stability

Ohio Markets: Midwest Strength

Dayton and Toledo (1.8-2.0 months) represent classic Midwest seller's markets:

Common Characteristics:

- Affordable pricing: Median prices under $200k in many neighborhoods
- Strong rental yields: 8-12% gross yields possible
- Manufacturing revival: Reshoring creating jobs
- Limited new construction: Little competition from builders
- Stable populations: Retention of residents

Investment Opportunity: These markets offer combination of seller's conditions with affordability, allowing investors to acquire properties in competitive but accessible markets.

Strong Seller's Markets (2-3 Months Inventory)

Markets with 2.0-3.0 Months Supply

Market/MetroMonths of InventoryRegionMedian PricePrice TrendMarket ConditionsCleveland, OH2.3 monthsMidwest$—+5% (state)Tight urban marketCincinnati, OH2.5 monthsMidwest$—+3.2%Strong Ohio marketStaten Island, NY2.6 monthsNortheast$—RisingNYC borough scarcityKaneohe, HI2.8 monthsHawaii$1,261,500+3%Windward OahuHudson County, NJ2.9 monthsNortheast$—RisingNYC metro suburb

Ohio Metro Markets: Cincinnati, Cleveland, Columbus

Ohio's three major metros all show strong seller's market conditions despite different economic profiles:

Ohio Metro Comparative Analysis - Q1 2026

MetroMonths SupplyMedian PriceYoY AppreciationNew Construction ShareMarket TightnessColumbus2.1 months$285,000+3.2% increase in permitsTightest major Ohio marketCincinnati2.5 months$—ModerateLimitedStrong seller's powerCleveland2.3 months$—+5% (state level)Very limitedResilient despite affordability

Columbus Market Deep Dive:

Columbus represents Ohio's hottest major market:

Strengths:

- Tech sector growth: Major corporate presence, startup ecosystem
- Ohio State University: 60,000+ students create constant demand
- Affordable compared to coasts: Median $285k vs. $415k nationally
- Young population: Below-average age attracts millennials
- Job growth: Steady employment expansion

Inventory Challenge:

- 2.1 months supply = strong seller's market
- Building permits up 18% in Q1 2026 but insufficient to meet demand
- Emerging neighborhoods: Franklinton, Near East Side gentrifying rapidly
- Investment activity: Both owner-occupants and investors competing

Forecast: Columbus expected to maintain under 3 months through 2026, with 3-4% annual appreciation.

Cleveland Market:

Surprising Strength:

- 2.3 months supply defies post-industrial stereotypes
- Affordability advantage: Lower baseline pricing attracts buyers
- Healthcare sector: Cleveland Clinic, University Hospitals major employers
- Neighborhood revival: Downtown, Ohio City, Tremont rebounding
- Lakefront premium: Limited waterfront drives values

Cincinnati Market:

Steady Performance:

- 2.5 months supply = solid seller's market
- Diverse economy: P&G, Kroger, manufacturing mix
- Regional gateway: Northern Kentucky, Southeast Indiana extend metro
- Historic neighborhoods: Strong demand for renovated urban housing
- Moderate appreciation: Sustainable 3-4% growth

Investment Perspective:

Ohio metros offer rare combination:

- Seller's market conditions (under 3 months inventory)
- Affordable entry prices ($200-300k median)
- Strong rental yields (7-10% gross)
- Economic stability (healthcare, education, manufacturing)
- Appreciation potential (3-5% annually sustainable)

New York Metro: Staten Island & Hudson County

Staten Island (2.6 months):

The most affordable NYC borough maintains tight seller's conditions:

Market Metrics:

- 2.6 months supply = strong seller's market
- Sale-to-list ratio: 98.8% (selling near full ask)
- Multiple offers: Common on desirable properties
- Limited land: Borough can't expand significantly
- NYC access: Lower prices than Manhattan/Brooklyn with commute access

Challenges:

- Transportation: Ferry/bus/driving to Manhattan
- Population density: Lower than other boroughs affects services
- Construction costs: Expensive to build new

Forecast: Staten Island expected to remain 2.5-3.5 months through 2025-2026.

Hudson County, NJ (2.9 months):

NYC metro suburb with strong seller's dynamics:

Strengths:

- PATH train access: Direct rail to Manhattan
- Jersey City growth: Major development hub
- Affordable vs. NYC: Significant savings over Manhattan
- Corporate presence: Financial services, tech companies
- Waterfront development: Premium housing along Hudson River

Market Conditions:

- 2.9 months supply = seller's market
- 98.8% sale-to-list ratio = minimal negotiating room
- Quick sales: Desirable properties move fast
- Competition: Multiple offers on well-priced homes
Standard Seller's Markets (3-5 Months Inventory)

The national average of 3.3-4.6 months means most U.S.

https://agentsgather.com/sellers-markets-u-s-markets-with-under-5-months-of-inventory/