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Where Sellers Are Slashing Home Prices To Attract Buyers

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Only a few months ago, homeowners lived a high life. Everything was sailing well once they decided to list their homes. They didn’t have to modify much of anything or stage the room to make it bigger or look better.On the contrary, many didn’t even bother themselves cleaning Their home before opening them to enthusiastic buyers. Still, many sellers still received multiple offers that far exceeded the asking price from the buyer.

As they say, the times are changing. fast..

Buyers are now dropping out of the market like annoying midsummer flies. Record highs and still rising home prices Coupled with Higher mortgage rate Defeat the budget hit by their inflation.Fear of another recession, falling stock markets, and growing malaise about global conditions Sideline buyer..

A seller looking at a neighbor’s house (a house with a kitchen and bathroom that hasn’t been renewed for decades) was sold to full cash buyers at record prices within a few days of spring, causing a dramatic change in the market. I was stunned.Some sellers across the country continue to receive favorable offers, while others lucky Get offers below list price. As a result, less fortunate people have lowered their asking prices in the hope of attracting buyers.

As a result, in some of the country’s most popular real estate markets, widespread price cuts have moved from scarcity to standard operating procedures. But where are they most happening? Realtor.com® has set out to find the city with the highest rate of price cuts. These are the metros where sellers are most in step with what buyers are willing to pay for their property, and buyers may be able to negotiate better deals.

“With the withdrawal of buyers, homes will stay in the market longer and more homeowners will need to lower prices to close the deal,” said a senior economist at Realtor.com. George Latiu..

Regions in countries with significant price cuts tend to be the regions that have received a lot of attention from out-of-state buyers, with prices soaring most out of the reach of many potential local buyers. ..

With the exception of Sacramento, CA (7th) and Colorado Springs (8th), eight of the top 10 most discounted metropolitan areas are during the COVID-19 pandemic to date (March 2020). I experienced a high evaluation. (June 2022) It will rise in the same period from 26.2% nationwide.

“Price cuts have been hit hardest in markets that raged during the pandemic, where there was an influx of buyers seeking quality of life, more space and affordability,” said Latiu. say. “These are also markets where prices have risen sharply due to inadequate housing supplies.”

To find the most discounted locations, the Realtor.com data team analyzed the 200 largest metropolitan areas and calculated the locations with the highest percentage of discounted home listings on Realtor.com in June. .. To achieve geographic diversity, we have included only one metro per state. (Metro includes major cities and surrounding towns, suburbs, and smaller urban areas.)

Over the years, more metros are expected to be on this list.

“As the number of homes grows, we can expect price cuts to become commonplace, especially in high-cost areas,” says Ratiu. “For buyers, this change shows more opportunities in the coming months, especially in the fall and winter.”

Now let’s take a look at some places where buyers may be able to find bargains. perhaps.

To find the most discounted locations, the Realtor.com data team analyzed the 200 largest metropolitan areas and calculated the locations with the highest percentage of discounted home listings on Realtor.com in June. ..

(Realtor.com)

Metro with the highest rate of price cuts in June:

1.1. Reno, Nevada

Reno, Nevada

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Median Home Price: $ 677,500
Percentage of properties with price cuts: 32.6%

2.2. Austin, Texas

Austin, Texas

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Median Home Price: $ 620,000
Percentage of properties with price cuts: 32.4%

3.3. Phoenix, Arizona

Phoenix, Arizona

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Median Home Price: $ 548,500
Percentage of properties with price cuts: 29.5%

4.4. Anchorage, Alaska

Anchorage, Alaska

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Median Home Price: $ 436,00
Percentage of properties with price cuts: 28.5%

5.5. Boise, Idaho

Boise, Idaho

(Getty Images)


Median Home Price: $ 587,900
Percentage of properties with price cuts: 27.4%

6.6. Ogden, Utah

Ogden, Utah

(Getty Images)

Median home price: $ 580,100
Percentage of properties with price cuts: 27.4%

7. Sacramento, California

Sacramento, California

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Median Home Price: $ 642,500
Percentage of properties with price cuts: 25.2%

8.8. Colorado Springs, Colorado

Colorado Springs, Colorado

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Median Home Price: $ 550,000
Percentage of properties with price cuts: 25.1%

9.9. Evansville, Indiana

Evansville, Indiana

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Median Home Price: $ 246,000
Percentage of properties with price cuts: 24.7%

10.10. Medford, Oregon

Medford, Oregon

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Median home price: $ 562,500
Percentage of reduced lists: 23.2%

Some sellers in the hottest pandemic market have significantly reduced prices

Austin, Texas (No. 2), Phoenix (No. 3), and Boise, Idaho (No. 5) became the poster real estate market where house prices soared during the pandemic.

Austin, Texas’s funky capital, has attracted a flood of new residents and a number of new jobs in the region, attracted by the low prices and taxes of trendy cities compared to many coastal cities. .. For example, Tesla relocated its headquarters to the area in late 2021.

Meanwhile, a crowd of Californians and other refugees from expensive West Coast cities flowed into Boise, the center of artistic and fast-growing technology. Phoenix has proven to be very popular with families and baby boomers who are about to retire.

Many retired and high-income professionals who could suddenly work from anywhere have moved to these bright red areas. Many of these newcomers have sold more expensive city homes to buy real estate in Austin, Phoenix and Boise. This has caused prices to skyrocket beyond the means of many locals.

In Austin, prices rose by more than 66% from March 2020, when the COVID-19 shutdown began, to June of this year. Over the same period, it increased by about 35% in Phoenix and 53% in Boise.

But before it was too late, sellers competed to bring their homes to market, so this spring the number of homes for sale more than doubled in each of these metros.

“Sellers are worried. They missed the peak of the market,” says Phoenix real estate agent. Christian Ryan, Re / Max fine properties. “So they are putting their homes up for sale as soon as possible while their property can still get high prices.”

However, in some markets, such as Boise, the number of buyers has declined while more homes have been put up for sale as new homes hit the market.

“We are already we [were] Drive so many buyers out of the market. Then, when interest rates went up, the problem doubled. ” Rob Inman, Real Estate Agent and Operations Director of Boise’s Best Real Estate. “Even those who can afford it now, there are those who are a little refraining from seeing what the interest rates and prices will be.”

Sellers who priced homes in the same way they sold in the spring found that they weren’t keeping pace with the current market. Many recent sales have signed mortgage rates a few months before the threat of recession was barely glimpsed in most imaginations.

“I understand that sellers want to get the highest price, but they need to understand that the market is declining. They have to reassess their expectations. “Austin-based real estate brokers say Blood Pauly, Of Pauly Presley Real Estate. “It’s still a seller’s market, but it’s not at the level of madness in the last two years.”

According to realtors, instead of getting a dozen offers, they say they haven’t got one or two, and in some cases three, or even none.

“The days of bidding wars are gone in most homes,” says Ryan. “If the seller needs to sell, they are lowering their price to get the buyer there.”

Cheap alternatives in big cities have a lot of price cuts

In many small and affordable cities other than large and expensive cities, prices have risen significantly as the pandemic intensified. But now the costs are so high in many of these places that they aren’t attractive to anyone looking for a bargain.

And as more homes hit some of these markets, buyers are more likely to balk at higher prices.

It left the seller scrambling to adjust in places like Ogden, Utah (No. 6), and Colorado Springs (No. 8), both are famous for being close to big cities.Ogden is big so it’s only about 40 minutes Salt Lake CityBut the house is about $ 50,000 cheaper.Colorado Springs is about an hour south Denver.. But buyers who don’t mind commuting can save about $ 130,000 at home.

A wave of new residents flows in during the pandemic Sacramento (No. 7) From more expensive California cities like Silicon Valley San Jose When San Francisco, Inflated. Prices also surged, rising 22% from March 2020 to June 2022.

However, the Sacramento market has since slowed and has been hit by three factors: rising mortgage rates, lower stock and cryptocurrency markets, and fewer buyers from the Bay Area, said real estate agents in the Sacramento region. Steve OstromColdwell Banker Realty.

“In our area, we have a lot of money that people make when they buy a house,” he says. Many people receive more down payment than the traditional 20% down payment. But it has nothing to do with inflation and financial market turmoil. “The stock market has hurt us [mortgage] Interest level. “

Homes in the $ 600,000 to $ 1 million rise range are “most hurt,” he says. “Sellers who really want to sell their place are cutting prices significantly, if not more than 5%.”

Many small cities also have to adapt to the new housing market

It’s not just the overheated real estate market that has to adapt to the slowdown.The following small markets Reno, Nevada (No.1), Anchorage, Alaska (No. 4), EvAnsville, Indiana (No. 9), and Medford, Oregon (No. 10) is also reducing the price in order to contract the property.

Housing is still considered affordable in Evansville, with a median of only $ 246,000, but surged about 43% during the pandemic process. This kind of increase was not sustainable for the locals, so something had to be given. This small town is located between St. Louis and Indianapolis.

They shot 36% at Anchorage in central Southeast Alaska. About two hours from Sacramento, it rose 30% in Reno on the California border. Increased 28% in Medford, southern Oregon.

“Cheap prices made it easier for people to get out and buy real estate,” says a Reno-based realtor. Sarah Scatini.. She is also chairman of the Reno / Sparks Association of Realtors. “Currently, mortgage rate hikes will hurt purchasing power a bit … so house prices have to go down to realistic levels.”

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Watch: 10 US Markets with Slow Home Sales

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