A new report from Redfin shows that sluggish homebuyer activity is forcing sellers to adjust their price expectations. The median asking price fell to $416,000 for the first time in six months.
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Weak homebuyer demand has led to the largest drop in home prices since November 2022, according to a market report released by Redfin on Thursday.
Sticky mortgage rates and rising median home prices have led to a slower-than-usual spring home buying season, with inventory duration rising to a median of 46 days for the first time in eight months. As expected, sellers are starting to lower their asking prices—6.4% of listings saw price decreases in May, causing the median asking price to drop $3,000, or 0.71%, to $416,623.
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Growth in new listings has also slowed over the past few weeks, meaning buyers have to be competitive with their offers. The data showed that the average listing-to-sales ratio was little changed compared to May 2023, falling just 0.2% to 99.5%.
However, median home prices, homes for sale and new listings are all rising on the West Coast. In May, San Jose saw double-digit annual gains in median home prices (+12.4%), homes for sale (+13.7%) and new listings (+34.5%). Meanwhile, Anaheim, San Francisco, San Diego and Oakland all grew on one or all of the city-level metrics tracked by Redfin.
Texas and Florida, on the other hand, saw the largest declines in median home prices, pending homes for sale, and new home listings. Fort Worth (-0.4%) and San Antonio (-0.3%) were the only major markets to see a decline in median home prices, while Houston (-15.1%) and West Palm Beach (-14.4%) saw larger declines in the price of homes for sale Maximum sales volume.
Chicago saw the largest decline in new listings (-10%).
Despite the downturn, Redfin Premier California agent Christine Chang said there’s still plenty of competition for well-maintained and affordable listings.
In the Bay Area, homes priced at $1 million and under are still receiving multiple offers, she said.
“People who buy now often do so because they are having children or looking for a home more suitable for a family,” Zhang said in a statement. “My advice to these buyers is to keep an open mind: Consider single-family homes that are a little dated but don’t require major renovations, and/or homes in less well-known, non-fashionable neighborhoods.”
“Homes of this type tend to stay on the market longer, and buyers may be able to avoid competition and purchase a home at the asking price rather than engaging in a bidding war,” she added. “Buyers who are comfortable with smaller spaces should Consider apartments; they are relatively unpopular at the moment and many are below asking price.
Email Marianne McPherson