Price Reductions break records in housing market
Last month, over 6% of the nation's home sellers decided to cut their asking prices, resulting in the median asking price dropping.
Additionally, the existing inventory of homes is growing in many areas.
However, it's important to note that a national figure of 6% means very little in the real estate world, which is highly localized and varies significantly from street to street and city to city. Watching talking heads say things such as "home prices are going to boom - or bust" - is disingenuous without further digging into a local market. National averages can obscure the true dynamics happening in specific markets.
For example, recent data shows substantial price reductions in several key cities:
Reno, NV: 32.6% of listings saw price reductions.
Austin, TX: 32.4% of listings saw price reductions.
Phoenix, AZ: 29.5% of listings saw price reductions.
Anchorage, AK: 28.5% of listings saw price reductions.
Boise, ID: 27.4% of listings saw price reductions.
Ogden, UT: 27.4% of listings saw price reductions.
Sacramento, CA: 25.2% of listings saw price reductions.
Colorado Springs, CO: 25.1% of listings saw price reductions.
Evansville, IN: 24.7% of listings saw price reductions.
Medford, OR: 23.2% of listings saw price reductions.
These specific examples highlight the variability in the real estate market and the importance of understanding local trends over national averages (Realtor Homes) (Norada Real Estate Investments) (CoreLogic®).
These factors suggest that price growth could continue to soften during summer and fall, especially if mortgage interest rates remain high. This localized approach is crucial for buyers and sellers to make informed decisions in their specific markets.
Price cuts are a leading (not lagging) indicator of a market that is shifting towards a buyers market, a shift that is already in place in some markets. Market cycles last 7-11 years, set by Clement Juglar back in 1860.
Process of price pressure with price drops:
Current listings drop price
Current listing goes under contract in 30 days
30 days plus 45 days = closing date
June 2024 - most markets have seen at least 2 months' trend of price drops, with the NE escaping this in some places (contact us below for data)
October / November, the homes with price cuts are now reporting the closing and appraisers are using those new appraisals as 'comparables' for other sales. As these reports climb, more and more banks are going to question the buyers who are getting a mortgage, when the appraiser goes out and now the home is not worth as much as the value on the contract. Some buyers choose to pull out, or negotiate a lower price.
And so the cycle continues for 3.5 - 5.5 years on average
Price dropping in YOUR market? Want to sell now? Get your full market value cash offer, and choose your move out date between 14 - 90 days. Or Find Your Expert Agent for a traditional or CPO listing.
Contact us at this link for a 30 data point report on your zip code anywhere in the USA.
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