Why Are so Many Homes Being Taken Off the Market Right Now?
Buying a house during the colder months is often a smart move , but this year it’s not. A new report from real estate firm Redfin shows that, on average, a record 2% of homes listed for sale in the US market were removed from listings each week during the 12 weeks leading up to Nov. 20. For buyers and sellers alike, this can sound worrisome. That’s what’s happening.
Why is this happening?
Redfin analyzed MLS data from 43 of the country’s 50 most populous metropolitan areas and determined that sellers are delisting their properties because they are not receiving offers at their preferred price, and in some cases not receiving offers at all. The monthly mortgage payment for a house with an average asking price is also now 40% higher than a year ago.
While there may have been a frenzy in the housing market last year, it looks like it has indeed slowed down. Home prices jumped in the midst of the pandemic, resulting in a “pandemic boom,” but places like Sacramento, California and Austin, Texas are now seeing the biggest drop in listings.
Which cities have been hit the hardest?
The 15 metropolitan areas with the most delistings in the 12-week study period:
- Sacramento, California (weekly average 3.6% of homes delisted)
- San Francisco (3.4%)
- Oakland, California (3.3%)
- Seattle, Washington (3.2%)
- San Jose, California (3%)
- Boston, Massachusetts (2.9%)
- San Diego (2.9%)
- Los Angeles (2.7%)
- Philadelphia (2.7%)
- Denver (2.7%)
- Detroit (2.6%)
- Providence, Rhode Island (2.6%)
- Anaheim, California (2.5%)
- Indianapolis (2.5%)
- Portland, Oregon (2.5%)
What does this mean for buyers and sellers?
Not all of this can be cause for despair. Desiree Chappell of Revolution Mortgage told Lifehacker: “In the Houston area, we’ve definitely seen offers drop, but for our buyers, in some cases, it has made buying more affordable due to sellers being more willing to contribute to closure costs or repair. when sellers used to be able to choose the highest and best from a variety of offers.”
She pointed out that refinancing is an option buyers can consider when mortgage rates fall. But sellers may want to wait. Redfin’s David Palmer noted in the data release that he had sellers cancel listings and was used to them doing so in the fall with the intention of relisting in the spring. But talk of a looming recession is making sellers nervous about the near future: “Now people are talking about trying again in a year or two when the economy improves.”