As sellers are forced to lower their “unrealistic expectations” about the prices they may demand, cities that saw skyrocketing property prices during the COVID-19 epidemic are now seeing their values come back down to earth.
According to a report released on Monday by the real estate agency Redfin, a large percentage of property sellers reduced their asking price in July, especially in areas that saw a housing boom during the epidemic.
Seventy percent of ads in Boise, Idaho, which was a popular location for West Coast remote workers during the epidemic, were reduced in July, up from only a third a year earlier.
Last month, 58 percent of homes were taken off the market in Denver, while 56 percent of listings in Salt Lake City had their original asking prices lowered.
According to Boise Redfin realtor Shauna Pendleton, “individual house sellers and builders were both eager to cut their prices early this summer, mostly because they had unrealistic expectations of both price and timing.”
They overpriced since their neighbor’s house just sold for an outrageous amount, and they had heard rumors that numerous bids would come in during the first weekend, so they had set their expectations accordingly.
Above are the ten cities where listing prices decreased the most last month.
In Boise, where 70% of property listings were reduced below their original asking price last month as sellers faced their “unreasonable expectations,” is a housing development.
“My advise to sellers is to price their house fairly from the outset, acknowledge the slowdown in the market, and be aware that it can take longer than 30 days to sell. Someone shouldn’t have to lower their price if they are selling a great house in a popular area.
Despite industry statistics showing that property prices are still higher than they were a year ago across the board and in almost every area, listing reductions have sharply risen as sellers’ high hopes collide with hard realities.
Redfin reported that in July, a record amount of houses were listed for sale throughout the country with price reductions.
There were less than 15% of homes listed for sale at a discount from the original asking price in each of the 97 cities examined.
Boise, Denver, Tacoma, Sacramento, Phoenix, San Diego, and Portland were among the 20 housing markets that cooled the quickest in the first half of 2022, accounting for more than half of the cities with the highest percentage of price decreases.
Redfin says that during the epidemic, when tech employees and other white collar workers left more expensive regions and pushed up property prices in smaller towns, those markets had drawn a sizable number of interested purchasers.
Denver had a 58 percent decrease in property listings last month.
The national median sales price for homes in July was $403,800, a rise of 10.8% from a year earlier and barely shy of the June record high. Home prices are still quite robust.
But as the market cools, buyers are in control and many sellers are being forced to lower their asking prices in order to make a sale.
Homebuyers are less likely to purchase at exorbitant prices due to rising mortgage rates, and the cooling housing market has increased the available inventory for buyers.
Only 15.7 percent of listings in McAllen, Texas were reduced in July, according to the Redfin report, albeit this was still higher than the 11.7 percent rate recorded a year earlier.
In a remarkable break from the norm, some communities in northern Illinois witnessed fewer price reductions in July than they did a year earlier, suggesting that the Chicago housing market is picking up momentum.
Lower rates of price declines were seen in Chicago than they were in the neighboring Illinois communities of Elgin and Lake County.
Despite a dip in house sales, prices are still holding steady, rising 10.8% from a year ago to the national median sales price of $403,800 in July.
This week, the average rate for a 30-year fixed mortgage was 5.13 percent.
The aggressive interest rate increases by the Federal Reserve to combat inflation have had a negative impact on the housing market by sharply increasing the expenses of obtaining a mortgage.
According to information from home financing company Freddie Mac, the average interest rate on a 30-year fixed-rate mortgage has increased to 5.13 percent from 3.22 percent at the beginning of the year.
Federal statistics released on Tuesday revealed that in July, new single-family home sales in the United States fell to their lowest level in more than six years.
The Commerce Department reported that new house sales dropped 12.6 percent for the month to 511,000 units in January 2016, which was the lowest level since January 2016.
From the previously reported 590,000 units, June’s sales rate was lowered down to 585,000 units.
Sales increased in the Northeast, but fell in the West, Midwest, and South, where demand had been particularly brisk lately.
In July, sales were down 29.6% compared to the same month last year. They reached their greatest level since the end of 2006 in January 2021, peaking at a pace of 993,000 units.
According to industry statistics, existing home sales, which make up the bulk of all house sales in the US, also fell 5.9% from June to a seasonally adjusted annual rate of 4.81 million, a 20.2 percent loss from a year earlier.
Although somewhat down from the record established a month earlier, the national median sales price for homes in July was $403,800, reflecting a 10.8% gain from a year earlier.