Home sellers are becoming anxious as the once-hot property market rapidly cools.
According to Realtor.com, one in five sellers lowered their asking price in August. That proportion was only 11% a year ago.
In the four weeks that concluded on August 28, the average property sold for less than its list price for the first time in more than 17 months, citing a Redfin research.
Simply put, homes are not selling as quickly as they were six months ago when there was a high demand and a limited supply, bidding battles were common, and contracts could sometimes be signed in less than a weekend. Homes stayed on the market in August for an additional five days on average than they did in August of last year, marking the first yearly rise in time on the market in more than two years.
Despite fewer sellers choosing to market their houses, the quantity of properties for sale is rapidly increasing, up nearly 27% from a year ago. According to the National Association of Realtors, pending sales in July, which represent signed contracts on existing properties and are the most current sales statistics available, were over 20% fewer than in July 2021.
“For many of today’s buyers, the uptick in for-sale home options is taking away the sense of urgency that they felt during the past two years, when inventory was scarce,” said Danielle Hale, chief economist for Realtor.com. “As a result of this shift, coupled with higher mortgage rates, competition continued to cool in August, with listing price trends indicating that home shoppers are tightening their purse strings.”
According to Realtor.com, the typical listing price in August was 14% lower than it was in August 2021 and almost 42% cheaper than it was in August 2019—before the coronavirus outbreak sparked a housing boom.
Since January, mortgage rates have been climbing. They recently reached a high in June before marginally declining in July and the majority of August. However, they are once more on the rise and have almost reached that level from June.
Redfin said that at the end of August, inquiries for home tours and other services related to home purchasing were down 16% from the same time last year.
According to house tour technology business ShowingTime, tour activity was also down 9% from the beginning of the year, compared to an increase of 11% at the same time last year.
“The post-Labor Day slowdown will likely be a little more intense this year than in previous years when the market was super tight,” said Daryl Fairweather, Redfin’s chief economist. “Expect homes to linger on the market, which may lead to another small uptick in the share of sellers lowering their prices.”
This article was originally posted here.