Sellers Cutting Their Asking Prices

SEATTLE – (By Dale King, Realty News Report) – The real estate market across the USA has just bestowed a roller coaster ride on folks who’ve been looking to buy or sell property, according to a new report from real estate brokerage Redfin.

Nationwide, 6.4 percent of home sellers cut their asking price during the four weeks ending May 26, on average, the highest share of reductions since November 2022. The median asking price of a home dropped roughly $3,000 to $416,623 in the last week.

But Redfin also noted that at virtually the same time, the median sale price of a dwelling rose to another record high, pricing some would-be buyers out of the market.

But median prices didn’t increase in all metros. In fact, Houston and a couple of other Texas metropolitan areas – Fort Worth and San Antonio – were among communities that found themselves on the short end of that median price measuring stick.

The year-over-year median price in Fort Worth for the four-week period ending May 26 dropped a tad – just .4 percent – while San Antonio lost even less for that same period — .3 percent.

Houston, where the median price of a home dropped, was one of eight metros on the Redfin data sheet reporting a year-over-year decrease in this category. All those declines took place during pending sales.

For that four-week period ending May 26, the median sale price of a home totaled $390,613 – up 4.3 percent year-over-year — and the median asking price ranked at $416,623 – up 6 percent year-over-year.

Metros with the highest median sale price increases, said the Redfin report, were Anaheim, Calif., 19.3 percent; Detroit, 16.4 percent; Nassau County, N.Y., 12.5 percent; San Jose, Calif., 12.4 percent and West Palm Beach, Fla., also 12.4 percent.

While prices were addressed at some length by Redfin, other aspects of the real estate market also came into play.

The age of the single-family home inventory was a concern. “For-sale supply is growing more stale,” said the market analysis. “The age of inventory (the typical number of days active listings have been on the market) started rising year-over-year in May for the first time in eight months, hitting a median of 46 days.”

All the above data, the report notes, “suggests sale-price growth could soften in the coming months as persistently high mortgage rates turn off homebuyers. For now, the median-home sale price is up 4.3 percent year-over-year to another record high, though sale prices are a lagging indicator because they’re typically negotiated at least a month before a deal closes.”

“The market is slower than usual, but well-maintained properties listed for under a million dollars still get multiple offers,” said Christine Chang, a Redfin agent in the Bay Area. “People who are buying right now are typically doing so because they’re having a baby or looking for a more family friendly home.”

Redfin offered this bit of relief as well. “The typical U.S. homebuyer’s monthly housing payment dropped to $2,812, its lowest level in six weeks. Payments are declining because even though sale prices remain at all-time highs, mortgage rates have come down from their peak.”

The weekly average mortgage rate is 6.94 percent, the first time it has dipped below 7 percent since early April. However, the Redfin report warned that “the reprieve in rates may be short-lived. Daily average rates started increasing this week after a string of disappointing treasury auctions.”

High costs are dampening demand, Redfin’s report notes. Pending sales are down 3.4 percent year-over-year, on par with declines over the last month, and mortgage-purchase applications are sitting near their lowest level in six months.

Low inventory is another factor pushing down sales. Even though 7.8 percent more new listings (101,172 homes) hit the market than during the same period last year, listing growth has been losing momentum for the last few months, leaving buyers with fewer homes to choose from than there typically are in May.

Chang’s advice to folks searching for a residence is to be “open-minded. Consider single-family homes that are a bit outdated but don’t need major renovations and/or homes in lesser-known, non-trendy neighborhoods. That type of home tends to sit on the market longer, and buyers may be able to avoid competition and get a home for the asking price instead of engaging in a bidding war.”

“Buyers who can get by with less space should consider a condo,” she added. “They’re relatively unpopular right now and many are going for under asking price.”

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