Sellers Losing Grip on Housing Market

Sellers Losing Grip on Housing Market

The strong seller’s market is swinging more in homebuyers’ favor as the housing market enters transition. One of the key indicators is price drops on houses that are on the market.

When I start seeing sellers lower the listing price on homes that have been on the market a few weeks, I know the iron grip sellers held on the market has started to loosen. Bidding wars have started to ease and price cuts are now common.

The shocking thing is this happened in a 45-day period. Listings had multiple offers within 24 hours of hitting the market just weeks ago. Today we are seeing lots of price drops on homes that have been sitting on the market just a couple of weeks.

There is still a lot of pent-up buyer demand out there. But the rise in mortgage interest rates has priced some buyers out of the market. After months of trying to buy a $400,000 home in the Atlanta market, buyers are finally seeing $400,000 homes available to purchase without competing against 10 other buyers. The problem for some buyers is that they can no longer qualify for the loan to purchase the $400,000 home because mortgage interest rates increased from 4% to over 6% in what seemed like the blink of an eye.

HOME SELLERS Act now if you are thinking about putting your home on the market. As mortgage interest rates continue to rise the sellers’ market will fairly quickly become a buyers’ market. At a minimum, homes will take longer to sell. More likely there will be some correction in house prices as demand softens. See the helpful information below from Inman News.

More homesellers are dropping prices as bidding wars become less vicious, the latest signs that an ongoing decline in home demand is beginning to wrest the balance of power back from sellers.

“The housing market isn’t crashing, but it is experiencing a hangover as it comes down from an unsustainable high,” Redfin deputy chief economist Taylor Marr said in a separate report released Thursday. “Housing demand has already cooled significantly to the point that the industry has begun facing layoffs.”

Redfin announced on Tuesday it was laying off 8 percent of its employees due to a nationwide decline in home sales. Compass announced a 10 percent reduction in full-time staff on the same day. Meanwhile, homebuilders have been cutting back on the number of new construction projects they’ve begun in recent months, citing the same market conditions.

Inman News