APRIL 7, 2023
Why Does It Still Feel Like a Seller’s Market?
By Kerry Smith
RE usually sees cycles between buyer’s and seller’s markets, but this time it’s a bit different. Supply vs. demand hasn’t changed because both sides pulled back.
SEATTLE – New listings fell 21.8% year-to-year during the four weeks ending April 2, one of the biggest drops since the start of the pandemic, according to a Redfin study.
An increasing number of homeowners don’t want to move because they still have generational-low mortgage rates secured only a few years ago. While rates have fallen for four weeks in a row, according to this week’s report, they’re still about twice as high as they were before 2021.
As a result, buyers unafraid of current mortgage rates quickly scoop up new listings. Of homes going under contract, nearly half are doing so within two weeks; at the beginning of 2023, it was about 25%.
“Elevated mortgage rates are perhaps an even bigger deterrent for would-be sellers than for would-be buyers,” says Redfin Deputy Chief Economist Taylor Marr. “Giving up a 3% mortgage rate for one in the 6% range is a tough pill to swallow. Today’s serious homebuyers have grown accustomed to the idea of a 5% or 6% rate and have adjusted their budgets accordingly.”
“Shiny new listings are getting multiple offers and selling fast. The caveat is that they have to be priced correctly from the beginning,” says Denver Redfin agent Stephanie Collins. “One of my buyers recently made an offer on a move-in ready home in a popular area. The home was priced right in line with the market at $520,000; it received eight offers and went for $560,000 to a competing buyer.”
Florida ranks near top for rising home prices
In cities where buyer demand outpaces seller supply, home prices continue to go up – and Florida is home to three of the top five U.S. cities for price increases.
While Milwaukee led the nation for price increases (up 11.4% year-to-year), Fort Lauderdale came in second (up 8.9%), followed by West Palm Beach (up 8.2%), Miami (up 7.9%) and Columbus, Ohio (up 6.3%).
On the flipside, the top five price declines in the U.S. were largely on the West Coast: Home prices dropped in 28 of the U.S.’s 50 most populous metros, with the biggest drop in Austin, Texas (down 14.7% year-to-year), Sacramento (down 11.7%), Oakland, California (down 10.4%), San Jose (down 10.2%) and Seattle (down 9.6%).
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