During the traditional spring home buying season, sellers enthusiastically go public. But more and more buyers have not achieved it.
Lists of homes for sale in most parts of the country are still emerging, but sales are not keeping up. In fact, they are down from a year ago. In many cities, as homes stay in the market longer, the ever-changing market increasingly makes buyers picky.
One driver: Sellers are targeting high targets with their listing price, even if that means lowering it later. Listing platforms say that on Zillow, nearly 25% of listings have decreased, the highest share since at least 2018.
“Buyers have the option, although the market is stabilizing,” said Eve Metlis, a real estate agent at Watson Realty Corp. in central Florida, which saw listings rise 42% from the same period last year, bringing the market close to balance between buyers and sellers. But sales fell 11%.
“Many sellers still think it’s 2021 or 2022,” she added. “I call it the ideal pricing.”
Broker Redfin found that the highest median listing price for newly listed homes was $469,729 in March, but ended up selling for 9% less. Since the pandemic lockdown caused major market disruptions in May 2020, the gap between buyers and sellers has not been that big.
Mismatch pricing expectations reflect a growing financial security gap between those who already own a home and those trying to enter the market for the first time this spring. Many sellers are in a comfortable financial position and benefit greatly from rising home equity value. By contrast, first-time home buyers still face significant affordability barriers and uncertain economic environments and are looking for deals.
“Even after the price cuts, sellers are still in a pretty good position,” said Danielle Hale, chief economist at Realtor.com.
Buyers at least did better than they did a year ago. Income is usually still rising, with mortgage rates slightly lower than this time last year, helping to improve purchasing power.
National inventory presence rose about 30% in April compared to the same period last year, and may be more on the way, according to Realtor.com data. Historically, inventory peaked in July or August each year, then upgraded in the fall and winter, and then dropped in the fall.
In the market, another closely watched metric is also increasing. Last month, homes stayed on the market for an average of 50 days, four days longer than a year ago and 20 days longer than the pandemic purchase in 2022.
