The number of American sellers who have dropped their home’s for-sale price has gone up in recent weeks, according to new insights from Redfin.
Daryl Fairweather, Redfin’s chief economist, explained in the report that even though prices are high and competition remains strong, demand for homes has been marking a comeback as buyers don’t have any alternatives other than to keep trying when they miss out on a purchase.
“This continued demand for homes is enticing more homeowners to sell in order to avoid the fear of missing out on historically high prices,” said Fairweather. “This enthusiasm from both buyers and sellers is translating into continued growth in pending sales compared to last year.”
In its Housing Market Update report, which analyzed over 400 U.S. metro areas over a four-week period ending on August 22nd, Redfin reported that the median home price had increased on a yearly basis but an increasing number of sellers are dropping prices to entice buyers.
Although the overall housing market is cooling from 2021-highs, seller’s are still “very much in the driver’s seat,” of today’s housing market.
Median for-sale prices climb to over $360,000
Each week, an average of 5.1 per cent of homes listed for sale dropped their prices. This is an increase of 1.5 per cent compared to the same time interval last year, and the highest level since the four-week period ending October 13th in 2019.
Based on the latest Redfin data, the median for-sale price of a home increased 16 per cent year-over-year from $312,225 to $361,225 during the most recent four-week period.
The asking price for a newly listed home was also up on an annual basis, rising 10 per cent from 2020 to a median of $351,730. However, this is down by 2.7 per cent from the all-time high set during the four-week timeline ending June 27th, and was also the lowest level since mid-April.
More than half (52 per cent) of homes sold above list price, up from 32 percent in 2020.
Pending sales stay above 2020 levels
Pending home sales — the number of homes that are under contact — have been “declining seasonally,” dropping six per cent from the market peak that was established during the four-week period ending May 30th. Yet, pending home sales still remain up by 10 per cent compared to 2020, rising from 65,254 to 71,647 sales.
Homebuying activity appeared to be robust during the most recent four-week market interval. From January 1st to August 22nd, home tours went up 11 per cent compared to a 30 per cent increase throughout the same period in 2020. During the week ending August 22nd, Redfin’s Homebuyer Demand Index (which measures requests for home tours and agent services) was up 20 per cent from last year and reached its highest point since the week ending April 11th.
Number of annual new listings flatlines
Compared to 2020, the quantity of new listings entering the market only grew by one per cent during the most recent four-week interval, rising from 96,290 to just 97,297 homes. Redfin pointed out that this is typical with seasonal patterns. New listings were down by nine per cent from 2021’s market peak during the four-week period ending June 27th.
Active listings across the country fell sharply compared to last year. The number of active listings dropped from 861,696 to 662,995 year-to-year, a difference of 23 per cent. Yet, this is the smallest decline since the four-week period ending September 20th, 2020.
While active listings dipped just one percent from 2021’s peak (the four-week period ending August 8th) they have also risen 16 per cent from this year’s low point on March 7th.
Nearly half of homes had an accepted offer within two weeks
A little under half (49 percent) of homes that went under contract accepted an offer within the first two weeks on the market, which is an increase from 44 percent in 2020. About a third of homes on the market (35 per cent) that went under contract accepted an offer within one week of hitting the market, slightly better than the same period last year, then 32 per cent.
Homes put on the market lasted a median of 18 days during the most recent four-week market period, an increase from the all-time low of 15 days reported in late June and July. It is also much lower than the more than month-long period of 34 days recorded in 2020.