The bidding wars seem to be calming down—for now, at least.
Recent data from a real estate analytics company reveals that in May, more than half of the homes sold went for less than the asking price. This shift offers buyers a rare opportunity to call the shots, as noted by Cotality.
On average, homes were sold for about $45,000 below the original listing, with the report indicating that 56% of transactions fell short of asking prices.
“Savvy buyers are finding themselves in a market that’s open to negotiating price cuts, assistance with closing costs, and even mortgage rate buyouts,” explained Daniel Boswell, a senior economist at Kotarity.
However, this favorable atmosphere for buyers mostly benefits those who are financially able to move. Boswell mentions that many homeowners still face significant challenges, including rising interest rates and insurance costs.
Interestingly, buyers now require around $200,000 more than they did a decade ago to purchase a median home.
Overall, sales have dipped by 15% compared to last year, yet the median price remains steady at $495,000. Meanwhile, mortgage rates hover around 7%.
On a national scale, homes are now sitting on the market for an average of 58 days before being sold.
The market is sluggish, continuing this trend for 16 months, which means buyers have more choices and less urgency to rush into contracts.
In some areas, inventory levels are surging.
For instance, Toledo, Ohio, saw a remarkable 128% increase in homes for sale compared to last year, while Savannah, Georgia, experienced a jump of 108%.
In Florida, the situation is mixed—Naples saw prices drop by 15% while sales increased by 29%. Conversely, Miami’s prices rose by 7%, pushing the median to $580,000, even as sales plummeted by 37%.
Among the 25 markets with the fastest inventory increases, only a few, like Los Angeles and Boise, experienced year-over-year sales growth. In most places, buyers are pulling back, often significantly.
Yet, sellers aren’t ready to concede easily. Many seem tied to the pricing expectations set during the pandemic, even as the market dynamics shift underneath them.
Listings have soared by 48% since last year and are up 38% so far this year. “This suggests that sellers are holding onto peak-era price hopes and would rather wait than negotiate,” noted Daniel Hale, Chief Economist at Realtor.com.
