Trying to buy a home for the past decade has been a very stressful exercise.
And while interest rates were low, and credit was relatively easy to get, home prices rose relentlessly.
Increasingly desperate buyers have been forced to engage in bid wars, give up inspections and even venture out for the chance to purchase a piece of the American Dream.
The competition has only intensified with the Covid pandemic. Newly freed from having to work in the office, employees sought comfort in low-cost communities away from coastal enclaves that have traditionally seen the highest prices and bid wars.
Meanwhile, those lucky enough to own a home can sit back and watch their net worth rise while taking out a home loan to buy necessities like vacations, sports cars or bitcoin.
With the Federal Reserve sharply raising interest rates to curb it inflationhome sellers are rudely waking up, at least in some markets.
Still, there is an ongoing debate about whether we Heading straight to (or is already in) the housing bubble continues to rage. While some analysts insist on this years of Unbound Housing price growth It inevitably leads to other accidents pointing to Inventories are still low and the fact that even a double-digit price drop would make homes in most markets more expensive than they were just a few years ago.
But whatever the outcome of the debate, there are cities where homeowners are doing the previously unimaginable and cutting prices in the hope of finding a buyer.
Get a better idea of the direction, a last round By Realtor.com I identified ten cities with the most price cuts listed.
West Coast Schadenfreude (Is this boom finally over)?
Home sellers do the unthinkable (in some markets)
The leader, by far, was a city Renault. The average list price for Nevada’s second largest city is $677,500, but it has seen 32.6% of its listings with price cuts.
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“Price cuts are hitting markets that have been on a hot streak during the pandemic — cities that have seen an influx of buyers looking for quality of life, more space, and affordability,” said George Ratio, chief economist at Realtor.com. “These are also markets that have seen a rapid rise in prices due to an insufficient supply of housing.”
The reason, according to the report, has to do with the disproportionate growth that has occurred in some of the same places throughout the pandemic.
A year later, the average listing price was $620,000 while 32.4% of recent listings have lowered prices from the original listing.
Arizona Phoenixwhich is another city that saw the average listing price soar to $620,000 due to flow Professionals and businesses from nearby California, 32.4% of their homes were below the original listing price.
Does this mean that I can come to these places and get a cheap house?
The trend, now, is clear – almost every city on this list has seen a rise in new residents during the pandemic and developers have had their sights set as a city that is “exploding” into a major investment opportunity.
What seemed like unlimited growth may have prompted some home sellers to set excessively inflated prices just to see if anyone would bite as a strategy. During the height of popularity for certain cities, this can sometimes work (in the first six weeks of 2022, about 500 homes in Seattle were sold for Over $100,000 higher than asking price) but eventually the market becomes more in line with demand in real life.
While the cities on this list reflect normalization after over-demand more than a real return to affordability, some cities have seen such spikes that the reductions are likely to continue in the coming weeks and even months.
“With an increasing number of homes for sale, we can expect price cuts to become the norm, especially in high-cost areas,” Ratio said. “For buyers, the change indicates more opportunities in the coming months, especially in the fall and winter.”