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Sellers are taking a more cautious approach when setting their asking prices as a greater share of their higher-shooting peers get burned.
The median asking price of newly listed homes tracked by Redfin dropped by 1.5 percent in the four-week period ending June 26, the Seattle-based real estate company said in a new report.
Half of home listings in that period asked for $405,547 or less, a modest decline from the previous four-week period, which was an all-time high for asking prices in the U.S.
Meanwhile, the number of pending home sales was 13 percent lower than it was at the same time last year. Other measures of buyer demand have been in decline as well as mortgage rate hikes and continued price increases drive the typical home purchase into less affordable territory, Redfin’s report found.
“Data on home-tours, offers and mortgage purchase applications suggest that homebuyers have noticed the shift in power and are no longer leaving the market in droves,” Redfin Chief Economist Daryl Fairweather said in the report. “Buyers coming back will provide support to the housing market, but between now and the end of year I think the power will continue to shift towards buyers, resulting in mild price declines from month to month.”
Touring activity in June was down 3 percent since the start of the year, according to data from ShowingTime, the home-tour management company. That’s a very different trajectory than ShowingTime observed last year, when tours rose 24 percent over the same period in 2021.
Despite the ongoing slowdown, asking prices remained 14.7 percent higher than in the same span last year, capping off a year in which sellers ratcheted up their expectations — and were mostly rewarded for doing so.
For every 30 homes listed this time in 2021, only one seller had to lower their asking price. In the four-week period ending June 26, that share of listings with price drops had more than doubled.
More than half of homes continued to spend a brief time on the market of 17 days or fewer. But there have been some early signs of a reversal in recent weeks, with most homes sitting on the market a couple days longer than they did in May and early June.
Some areas of the country have seen particularly pronounced slowdowns in how quickly homes are selling, Fairweather said in the report.
“Sometimes price isn’t even the reason a home is sitting on the market without selling—some more remote areas that were super popular during the pandemic are now being overlooked as buyers reconsider long commutes with high gas prices,” Fairweather said. “It’s a tricky market and you have to pay close attention to your local sales and listings to understand what’s happening.”