During the pandemic, home sellers had the upper hand as crowds of buyers competed for a limited pool of properties. However, there are signs that the tide is turning, as a growing number of sellers are now cutting prices.
About 1 in 7 listed properties had a price reduction in June — about double the rate from last year, according at Realtor.com. Some of the hottest markets during the health crisis are now seeing some of the deepest price declines, with nearly 1 in 4 properties in Austin, Texas, falling in price and about 1 in 5 homes in Phoenix and Las Vegas seeing a decrease . reference found.
The price cuts come as homebuyers face an affordability problem. On the one hand, the median sale price hit a new high of $450,000 in June — a number that is unaffordable for many households. At the same time, borrowing costs have skyrocketed, making it more expensive to finance a home loan.
More sellers are listing their properties this summer in hopes of scoring lucrative offers, which is easing inventory levels — and putting some price pressure on sellers.
“[A]Many homeowners rushed into the summer ready to list their properties and cash in on the equity raised by high prices, inventory has improved,” noted George Ratiu, chief economist at Realtor.com, in a tweet. this year’s property markets — price cuts’.
But there could be a downside for buyers if some owners delay listing their home because of these trends, Ratiu warned.
“As the number of new listings declines, it raises concerns that the nascent inventory improvement may prove elusive,” he said.
In May, US home affordability hit its lowest level since July 2006, when home values were soaring before the crash that triggered the Great Recession in 2008. according in the Wall Street Journal, citing the most recent data available from the National Association of Realtors.
Eight of the 10 cities with the biggest price declines in June had higher-than-average price appreciation during the pandemic, excluding Sacramento and Colorado Springs, Realtor.com reported.
Below are the 10 cities with the largest share of price cuts among listed properties in June: according at Realtor.com.
- Reno, Nevada: 32.4% of properties saw price reductions
- Austin, Texas: 32.4%
- Phoenix, Arizona: 29.5%
- Anchorage, Alaska: 28.5%
- Boise, Idaho: 28.4%
- Ogden, Utah: 27.4%
- Sacramento, CA: 25.2%
- Colorado Springs, CO: 25.1%
- Evansville, Indiana: 24.7%
- Medford, Oregon: 23.2%