After a stellar two-year run, the housing market is sputtering as buyers pull back sharply. One real-estate chief said the market is indeed course correcting, and it’s getting hard to make a deal as more contracts falling through.
With the Federal Reserve hiking benchmark interest rates, “demand fell sharply in May and June … [as] buyers were absolutely freaked out,” Redfin
CEO Glenn Kelman told MarketWatch in an interview.
Since then, the housing market has since recovered somewhat, he noted, but “we still will have, even for the deals that are under contract, a very high cancellation rate.”
“It’s just hard to put deals together because the economy is so volatile,” he added. “It’s a remarkably uncertain time.”
“‘It’s just hard to put deals together because the economy is so volatile.’”
— Glenn Kelman, Redfin
Responding to buyers pulling back from the market, sellers have also become increasingly apprehensive about listing.
New listings for homes have fallen 15% in the four weeks ending Aug. 21, a report published Thursday by Redfin said. That is the biggest decline in listings since the start of the pandemic.
That’s pushing down the supply of homes slightly, Redfin said, as the number of for-sale homes dropped 0.6% from the previous four week period.
To find a match quickly, sellers are pricing their homes more aggressively, with the median asking price of newly listed homes falling 5% from the record high set in May.
But not all sellers are able to find eager buyers. In some hot pandemic markets like Boise, Idaho, 70% of the homes for sale had their prices slashed in July, Redfin said.
Builders are also trying harder to entice buyers, Kelman added, and “just as aggressive” with price cuts as existing-home sellers.
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