Home prices are up but in some metros, sellers are slashing prices.
Of the largest 150 U.S. metros, only 29 saw a YOY increase in price reductions, with only 15.5% of all homes listed on Realtor.com getting a price cut in July, according to data from the website.
While that’s bad news for home shoppers everywhere else, buyers in those metros can benefit even when locking in a high interest rate.
The top five metros for price cuts are Huntsville, AL; Lafayette, LA; McAllen, TX; Jackson, MS; and Augusta, GA.
Rounding out the top ten are Memphis, TN; Fort Collins, CO; Cape Coral, FL; Greenville, SC; and Fort Wayne, IN.
Realtor.com limited the list to one metro per state for diversity’s sake, but nearby metros may also be seeing price cuts.
“Generally, there are two things that can drive an increase in price reductions,” says Realtor.com Chief Economist Danielle Hale. “One is if you have more homes on the market. Two is if there is a mismatch between what sellers are expecting and what buyers are willing and able to afford.”
The South and Midwest dominate the list due to an increasing number of homes for sale. All but one of the top ten markets had double-digit inventory increases YOY.
Some sellers have struggled to understand that the days of sky-high profits are over.
Many don’t want to give up their historically low rates without a big return, and stock shortages have convinced them they’ll be able to fetch the same prices buyers were shelling out two years ago. But with rates elevated and many Americans feeling economic anxiety, overpriced listings end up languishing online.
“What we’re seeing in the housing market is a reversal of what we saw in the [COVID-19] pandemic,” Hale noted. “Areas that attracted a lot of remote workers and saw prices skyrocket are seeing trends slow.”
Many of the metros listed attracted buyers during the pandemic housing boom thanks to their affordability at the time and warmer weather. But when home prices soared and an influx of new residents bumped up the cost of living, demand dwindled. The result is sellers willing to cut list prices to attract buyers.
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