During the pandemic, home sellers have had the upper hand as large numbers of buyers competed over a limited selection of properties. But there are signs that the tide is turning, with an increasing number of sellers now cutting prices.
About 1 in 7 listed properties saw price drops in June — about double the price from the previous year, according to Realtor.com. Some of the hottest markets during the health crisis are now seeing some of the deepest price cuts, with roughly 1 in 4 properties in Austin, Texas, seeing price drops and about 1 in 5 homes in Phoenix and Las Vegas seeing a decline, the report found.
The price cuts come at a time when home buyers are struggling to afford the costs. On the other hand, the median listing price hit a new high of $450,000 in June — an unsustainable number for many families. At the same time, borrowing costs rose, making mortgage financing more expensive.
More sellers are listing their properties this summer in the hopes of scoring profitable bids, easing inventory levels – and putting some price pressure on sellers.
“[A]Many homeowners rushed into the summer ready to list their properties and grab stock resulting from record high prices, and the stock has improved,” Realtor.com economist George Ratio noted in a tweet. This year’s real estate markets – price cuts.”
However, there could be a downside for buyers if some owners stop showing off their homes because of these trends, Ratio warned.
“With the number of new listings declining, it raises concerns that the emerging improvement in inventory may be out of reach,” he said.
In May, housing affordability across the United States hit its lowest level since July 2006, when home values were rising before the crash that caused the Great Recession of 2008, according to The Wall Street Journal, citing the latest available data from The National Association of. Brokers.
Realtor.com said that eight of the 10 cities with the biggest price cuts in June enjoyed above-average price hikes during the pandemic, with the exception of Sacramento and Colorado Springs.
Here are the 10 cities with the largest share of price cuts among listed properties in June, according to Realtor.com.
- Reno, Nevada: 32.4% of real estate prices lowered
- Austin, Texas: 32.4%
- Phoenix, Arizona: 29.5%
- Anchorage, Alaska: 28.5%
- Boise, Idaho: 28.4%
- Ogden, Utah: 27.4%
- Sacramento, California: 25.2%
- Colorado Springs, Colorado: 25.1%
- Evansville, Indiana: 24.7%
- Medford, Oregon: 23.2%