After a crazy few years of offers over asking price and bidding wars, the slowing real estate market is making it easier for some buyers to lock down the homes of their dreams.
Buyers have a lot more choices as the number of homes for sale is finally rising, increasing 6% in January from a year earlier, according to a recent realtor.com® report. In the largest, most expensive markets, the number of homes with those familiar “For Sale” signs out front were up 12% year over year.
That’s because more sellers want to cash in while the market is still relatively hot. At the same time, there are fewer buyers vying for their properties; sky-high prices, rising mortgage rates, and tax changes have simply made it too expensive.
“The greater availability of homes for sale is a good thing for buyers. But we’ve just had a record-low number of homes for sale in the last year,” says Danielle Hale, chief economist of realtor.com. “So the market’s improving for buyers, but it still has a long way to go.”
Of course, this market isn’t so great for sellers. Having seen the big bucks their neighbors had raked in over the previous years, many hoped to do at least as well, and priced their residences high. But as the market has shifted, sellers have been forced to adjust their expectations. About 15% of realtor.com listings saw price reductions, up 2% from a year earlier.
That doesn’t mean that home prices are falling overall. Prices rose 7% annually, to hit $289,300 in January. But the rate of price acceleration has slowed, down from 8% a year earlier. Markets with the most reductions were mostly located in warm-weather areas: Las Vegas; Silicon Valley’s San Jose, CA; Seattle; Orlando, FL; and Phoenix.
But there’s no relief in sight for buyers on a tight budget. The increase in inventory tends to skew toward the higher end. For example, the number of homes listed at $750,000 or more was up 12% over last year. Meanwhile, the number of more affordable homes priced at $200,000 or less fell 6%. Ouch.
“There’s a bit of a mismatch of what’s available for sale,” says Hale. “People are still interested in entry-level, more affordable properties.”