Redfin, the Seattle-based, technology-powered real estate company, reported on Thursday (8-25-22) that in the four-week period ending August 21st, new listings of homes fell 15% year-over-year. This marks the largest annual decline since the start of the COVID-19 pandemic. In turn, the supply of for-sale homes dropped 0.6% from the previous four-week period—a modest decline, but just the second such decline since February of 2022.
Redfin says that the significantly reduced number of homeowners putting their homes on the market for sale is partly a reaction to reduced demand and falling home sale prices. This has occurred as there are fewer buyers in the market due to rising interest rates and ongoing economic uncertainty.
During the same period, the median asking price of newly listed homes dropped 5% from their record high level, which was set in May of 2022, and sales prices have dropped 6% from the record high set in June of 2022. The share of for-sale homes with a price dropped leveled off after rising throughout the spring and early summer. As a result, those who are listing their homes are starting to price in line with the slower demand.
Commenting on the report, Redfin’s Economic Research Lead Chen Zhao said:
“Sellers are coming to terms with the fact that volatile mortgage rates have dampened demand. Some sellers are pricing lower, and some homeowners are staying put because they’re nervous they won’t get a good offer or they’re hesitant to give up their low mortgage rate.
Because the number of homes for sale is no longer rising, buyers’ newfound bargaining power is reaching its limit. It’s worth noting that early demand indicators such as tours and requests for help from agents are elevated from their June lows and remain steady. So, there is a pool of interested buyers out there, but sellers need to price fairly to attract them. If more sellers and buyers find that middle ground on price, we could see sales strengthen a bit.”
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