During the pandemic, home sellers have prevailed as hordes of buyers vie for limited properties. But there are signs that the trend is turning, as more and more sellers are now cutting prices.
About one in seven listings saw a price cut in June — roughly double the price at the same time last year, according to Go to Realtor.com. Some of the hottest markets during the health crisis are now witnessing some of the biggest price cuts, with nearly a quarter of homes down in Austin, Texas, and about a fifth in Phoenix and Las Vegas , the report found.
The price cuts come as homebuyers face an affordability crunch. On the one hand, the median listing price in June hit a new high of $450,000 — a figure that would be unaffordable for many households. At the same time, borrowing costs have skyrocketed, making mortgages more expensive.
This summer, an increasing number of sellers listing their properties in the hopes of lucrative bids are easing inventory levels — and putting some pricing pressure on sellers.
“[A]Realtor.com economist George Ratiu noted in a tweet that inventories have improved as many homeowners rushed to prepare to list their properties over the summer and acquire assets brought in by record prices. “That’s a welcome sign for the housing market this year – price cuts.”
However, Ratiu warned that buyers could face headwinds if some owners hold off listings because of these trends.
“With the number of new listings dwindling, there are concerns that the initial improvement in inventory could be elusive,” he said.
In May, housing affordability across the U.S. hit its lowest level since July 2006, when home prices surged before the crash that sparked the Great Recession in 2008, according to The Wall Street Journal cited the latest data from the National Association of Realtors.
Of the 10 cities that saw the biggest price cuts in June, eight except Sacramento and Colorado Springs saw above-average price appreciation during the pandemic, Realtor.com said.
Here are the 10 cities with the biggest price cuts in June listings: according to Go to Realtor.com.
- Reno, Nevada: 32.4% of properties drop in price
- Austin, Texas: 32.4%
- Phoenix, Arizona: 29.5%
- Anchorage, Alaska: 28.5%
- Boise, Idaho: 28.4%
- Ogden, Utah: 27.4%
- Sacramento, Calif.: 25.2%
- Colorado Springs, CO: 25.1%
- Evansville, Indiana: 24.7%
- Medford, Oregon: 23.2%