In the heart of the traditional spring homebuying season, sellers are enthusiastically listing. But increasingly, buyers just aren’t materializing.
Inventory of for-sale homes continues to surge in much of the country, but sales aren’t keeping up. In fact, they’re down from a year ago. In many cities, the shifting market has increasingly allowed buyers to be picky as homes stay on the market longer.
One driving factor: Sellers are aiming high with their listing prices, even if it means dropping them later. On Zillow, nearly 25% of listings had a price cut in April, the highest share since at least 2018, the listings platform said.
“Buyers have their choice, even though the market is stabilizing,” said Eve Metlis, a Realtor at Watson Realty Corp. in Orlando. In the central Florida city, listings are up 42% from a year earlier, bringing the market close to balanced between buyers and sellers. But sales are down 11%.
“A lot of sellers still think it’s 2021 or 2022,” she added. “I call it aspirational pricing.”
Brokerage Redfin found that the median newly listed home had a record-high list price of $469,729 in March but ultimately sold for 9% less. The gap between buyers and sellers hasn’t been that big since May 2020, when pandemic lockdowns were causing major market disruptions.
The mismatched pricing expectations reflect a growing divide in financial security between those who already own homes and those who are trying to gain access to the market for the first time this spring. Many sellers are in comfortable financial positions and have benefited handsomely from rising home equity values. In contrast, first-time buyers still face major affordability hurdles and an uncertain economic environment and are looking for deals.
“Even after price cuts, sellers are still in a pretty good position,” Realtor.com chief economist Danielle Hale said.
Compared to a year ago, buyers are doing at least a little better. Incomes are still generally rising, and mortgage rates are slightly lower than this time last year, helping boost buying power.
For-sale inventory nationwide was up about 30% in April compared to a year earlier, according to Realtor.com data, and more listings are likely on the way. Historically, inventory peaks each year in July or August before leveling off and then dropping in fall and winter.
Time on market, another closely watched metric, is also increasing. On average, homes stayed on the market for 50 days last month, four days longer than a year ago and 20 days longer than during the height of the pandemic buying frenzy in 2022.
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