Housing Market Update: 5% of Home Sellers Dropped Their Price in Recent Weeks

by Tim Ellis | RedFin.Com

Troy Warren for CNT #RealEstate

 

As demand eases and sellers adjust their price expectations, the housing market is slowly aligning to typical seasonal patterns.

The average share of homes with price drops each week is rapidly climbing during a time of year when it is usually relatively flat. This measure has now passed 5%—its highest level since the four-week period ending October 10, 2019.

That said, home prices are still rising and homes are selling very quickly, just slightly slower than before. Homebuying demand remains strong and the market is tipped heavily in sellers’ favor. However, home sellers can still overprice their homes, and those that do are quickly getting the memo—a week or two on the market without any bids—and adjusting their asking prices accordingly.

“The housing market is less hectic than it was in early spring, but it’s still far from typical. The move to a less imbalanced market is happening slowly,” said Redfin Chief Economist Daryl Fairweather. “As we approach the beginning of back-to-school season, home prices typically cool, supply winds down, and homes take longer to sell. All that’s happening, just very slowly. I don’t think the housing market will return to a fully typical state anytime soon, but we are starting to trend in that direction.”

Key housing market takeaways for 400+ U.S. metro areas:

Unless otherwise noted, the data in this report covers the four-week period ending August 15. Redfin’s housing market data goes back through 2012.

Data based on homes listed and/or sold during the period:

  • The median home-sale price increased 17% year over year to $361,973, a record high.
  • Asking prices of newly listed homes were up 10% from the same time a year ago to a median of $353,347, the lowest level since mid-April. This is down 2.2% from the all-time high set during the four-week period ending June 27.
  • Pending home sales were up 10% year over year, the smallest increase since the four-week period ending June 28, 2020. Pending sales were down 7% from their 2021 peak during the four-week period ending May 30.
  • New listings of homes for sale were up 3% from a year earlier. The number of homes being listed is in a typical seasonal decline, down 7% from the 2021 peak during the four-week period ending June 27, compared to a 13% decline over the same period in 2019.
  • Active listings (the number of homes listed for sale at any point during the period) fell 24% from 2020—the smallest decline since the four-week period ending October 25, 2020—and have climbed 15% since their 2021 low during the four week period ending March 7.
  • 50% of homes that went under contract had an accepted offer within the first two weeks on the market, well above the 44% rate during the same period a year ago, but down 7 percentage points from the high point of the year, set during the four-week period ending March 28.
  • 36% of homes that went under contract had an accepted offer within one week of hitting the market, up from 32% during the same period a year earlier, but down 7 percentage points from the high point of the year, set during the four-week period ending March 28.
  • Homes that sold were on the market for a median of 18 days, up from the all-time low of 15 days that had held for four weeks in late June and July, and down from 35 days a year earlier.
  • 52% of homes sold above list price, up from 30% a year earlier. This measure has been falling since the four-week period ending July 11 when it peaked at 55%.
  • The average weekly share of homes for sale with price drops rose to 5.1%, above 2019 levels for the first time this year, and 1.5 percentage points above the same time in 2020.
  • The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, decreased to 101.8%. In other words, the average home sold for 1.8% above its asking price. This measure is down 0.5 percentage points from its peak during the four-week period ending July 11, and up 2.7 percentage points from a year earlier.

Other leading indicators of homebuying activity:

  • Mortgage purchase applications decreased 1% week over week (seasonally adjusted) during the week ending August 13. For the week ending August 12, 30-year mortgage rates rose to 2.87%, the highest level in four weeks.
  • From January 1 to August 15, home tours went up 14%, compared to a 43% increase over the same period last year according to home tour technology company ShowingTime.
  • During the week ending August 15, the seasonally adjusted Redfin Homebuyer Demand Index—a measure of requests for home tours and other services from Redfin agents—edged up slightly from the previous week to its highest point since the week ending April 11, and was up 15% from a year earlier.

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