Some homeowners may need to reset their price expectations. Signs of a slowing real estate market are growing across the country—existing-home sales and new-home sales are falling as well as pending home sales. Pending home sales fell consecutively in the recent months and are now at the slowest pace in several years.
Homes are still selling fast but a slowdown is evident in many markets. Amid rising mortgage rates that are pricing more buyers out, some home sellers are having to revisit their asking price.
Price drops are particularly more common in migration hotspots, places that have been relatively affordable but saw home values surge as more people have migrated in from coastal areas since the pandemic began.
Close to 19% of home sellers dropped their price in recent months in seven of the 10 most popular migration destinations, the report says.
Many places like Boise or Sacramento that saw a surge in migration and a sharp increase in home prices over the past two years have now seen a drop-off in demand, leading sellers to adjust their prices with increasing frequency. When mortgage rates were at or below 3%, both local and out-of-town home buyers were more willing and able to tolerate high prices, but at 5%, many are priced out. A home’s price is driven by the balance of supply and demand, and when demand drops off and supply increases like it is now, rapid price increases evaporate quickly.
What does this mean for Buyers and Sellers?
- If you are a Buyer it means a greater selection of homes. Inventory is still very low by historical standards and the most desirable homes will sell quickly, so be prepared to act when your dream home goes on the market.
- If you are a Seller, you are still going to get a great price for your property. However you may not be seeing a higher and higher price each month. make sure your home shows beautifully and we will work together to set the right price for today’s market.