Home Prices Being Cut as Housing Market Cools
New York, NY, August 5, 2022-"There are a lot of unhappy people in the housing market right now. Among the most miserable are sellers realizing they have listed their properties too late," reports the Wall Street Journal.
“For much of the country, real estate had been on a tear since the start of the pandemic. Home prices are up about 44% over the past two years, according to Redfin.
“But prices have cooled lately and many homeowners are coming to grips with the reality that they may not get the same prices their neighbors did. Roughly one in seven homes on the market had a price reduction in June, according to Realtor.com. That is nearly double the rate of one in 13 homes a year ago.
“As more homeowners weigh cutting prices, they face several difficult decisions at once. They could need to cut prices once or even several times. Eventually, the seller may need to accept less than they feel their home is worth or choose to take it off the market and try again when conditions improve.
“Real-estate agents, meanwhile, are dusting off the old playbook for handling price reductions.
“Overall, the housing market remains solid. While there have been price reductions, the amount is still far less than was typical from 2017 to 2019, when the rate was one home out of every four or five.
“But there have been weakening signs as mortgage rates have risen and inventory stays on the market longer. Homes that have been on the market for three months or longer are reducing prices by around 11% from the list price, according to the National Association of Realtors.
“‘The days of bidding wars and homes selling for tens of thousands of dollars over asking are over,’ said Daryl Fairweather, chief economist at Redfin.
“Despite the average rate on a 30-year fixed mortgage dropping back below 5% this week, the increases this year priced many potential buyers out of the market, slowing the pace of sales and causing more inventory to sit, said Lawrence Yun, chief economist at NAR.”