Recently, buyers in the US housing market have finally regained the upper hand in negotiations, but achieving a deal at a low price is still difficult. According to the latest analysis by the real estate brokerage firm Redfin, in September of this year, nearly 85,000 sellers withdrew their homes from the market, an increase of 28% from the previous year, marking the highest level in eight years.
Redfin pointed out that due to weak demand, a large number of homes have been languishing on the market for a long time. In September, 70% of homes were listed for at least 60 days, with the average days on market for delisted homes reaching 100 days.
The main reason why home prices have not fallen as anticipated is the significant number of sellers exiting the market. In a market where supply is increasing and demand is weak, these factors typically lead to a decline in home prices.
Asad Khan, Senior Economist at Redfin, stated, “Many homes are priced higher than what buyers are willing to pay, but many sellers are unwilling to negotiate.”
Analysis shows that currently there are about 500,000 more sellers than buyers in the market, a stark contrast to the situation during the pandemic when it was a seller’s market and demand exceeded supply. The expectation gap between buyers and sellers is most apparent among homebuyers in recent years, with 47% of delisted homes in September being owned by individuals who purchased the properties in the past five years.
Khan pointed out, “Many homeowners who purchased during the pandemic still remember the hot seller’s market at that time and expect prices to remain high, hence they are unwilling to accept buyers’ price reduction requests or make compromises.”
Furthermore, from 2020 to 2022, homebuyers in general held very low mortgage rates, making it harder for them to let go of their properties, exacerbating the market stalemate.
Currently, the so-called “rate lock effect” is beginning to ease. In some markets, the deadlock between buyers and sellers has ultimately alleviated the pressure on home prices, especially in the Sun Belt region of the United States.
Cities with the highest proportion of homes listed for at least 60 days are concentrated in Texas and Florida, including Miami (85%), Fort Lauderdale (85%), Austin, Texas (83%), San Antonio (81%), and Dallas (77%). Redfin data shows that the average selling prices in Fort Lauderdale, San Antonio, and Dallas have decreased compared to the same period last year, while Miami’s prices have remained stable.
According to the S&P CoreLogic Case-Shiller U.S. National Home Price Index, national home prices rose by 1.3% in September, the lowest increase since the middle of 2023.