Buyers Gain Leverage as Market Slows

SEATTLE — Today’s average home listing is selling for under its asking price, and taking a longer time to sell, according to a new report from the real estate brokerage Redfin. While that’s not ideal for sellers, it’s good news for homebuyers who have been grappling with high housing costs and a shortage of inventory.

Redfin data as of January shows that nationwide, buyers may have more room for negotiation than they have in several years:

• The typical U.S. home is selling for 1.8% less than its asking price, the biggest discount in nearly two years.
• The typical home that sells is taking 56 days to go under contract, the longest span in nearly five years.
• More than half (56%) of listings are sitting on the market for at least 60 days without going under contract, roughly the same share during this time of year in 2023 and 2024. That’s down from the prior month, when 61% of listings were on the market for at least 60 days – the highest share in five years.

Today’s housing market is slow mostly because it’s so expensive to buy a home. The average 30-year mortgage rate was 6.96% in January. That’s down from the two-decade high of 7.62% hit in 2023 but remains well above the 3% to 5% rates that were common before and during the pandemic. The median U.S. home-sale price is up 4% year over year; together, high prices and rates have pushed the typical homebuyer’s monthly payment near record highs. Political and economic uncertainty is another reason some would-be buyers are pumping the brakes.

The upside of a slow market is that buyers have an opportunity to negotiate on price and terms for certain homes. Redfin agents in some parts of the country report that it feels like a buyer’s market, with sellers of homes that have been sitting on the market for a few weeks open to lowering the price.

Other Redfin agents note that while the pool of unsold inventory is growing and many homes are selling for under asking price, that doesn’t necessarily mean buyers have a big pool of desirable homes to choose from.

“More listings are hitting the market, but they’re not always the type of home buyers want and need,” said Charles Wheeler, a Redfin Premier agent in San Diego. “The listings lingering on the market tend to be in unpopular neighborhoods or require renovation. Relatively affordable, move-in ready homes close to highly rated schools are selling quickly, often with multiple offers.”

In coastal Florida, homes are selling for roughly 5% below asking price

Homes are selling furthest below their asking price in Florida. In West Palm Beach, Fort Lauderdale and Miami, the typical home is selling for roughly 5% less than its asking price, the biggest discount among the 50 most populous U.S. metros. Next come two other Florida metros: Tampa and Jacksonville, where the typical home is selling for about 4% less than its asking price. Homes in all of those metros are also selling for a bigger discount than they were a year ago.

Coastal Florida’s housing market has taken a hit as natural disasters become more frequent and intense, causing some would-be buyers to have second thoughts. Climate disasters have also led to a surge in home insurance costs, HOA fees and property taxes in Florida. Slow homebuying demand means more sellers are open to accepting an offer under asking price.

The typical home is selling for over its asking price in just seven of the 50 most populous U.S. metros, led by the Bay Area. The typical home is selling for roughly 3% above asking price in San Jose, CA, followed by Newark, NJ (2.5%), San Francisco (2.5%), Oakland, CA (1%) and Nassau County, NY (0.5%).

More than 60% of Miami homes sit on the market for 60+ days

There are five U.S. metros where 60%-plus of listings are sitting on the market for at least two months without going under contract. Three of them are in Florida. In both Miami and Pittsburgh, 63% of listings linger on the market for at least 60 days, followed by San Antonio (62%), Fort Lauderdale (61%) and West Palm Beach (60%).

On the other end of the spectrum is the Bay Area. Just over one-third of home listings in San Jose (34%), Oakland (36%) and San Francisco (38%) are sitting on the market for 60 days or more, followed by Boston (39%) and San Diego (42%).

Source: Redfin

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