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Redfin Reports Just 28% of Homes Are Selling Above Asking Price, The Lowest Springtime Level Since 2020

1. Pending home sales dropped 1% year over year, indicating market slowdown. 2. 28% of homes sold above asking price, down from 32% last year. 3. New listings up 5.2%, suggesting a buyer's market is emerging. 4. Median sale prices show a $28,950 discount from list prices. 5. Mortgage-purchase applications increased 10%, hinting at potential market recovery.

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FAQ

Why Bearish?

The decreasing percentage of homes sold above asking price suggests weakening demand, impacting RDFN's transaction volume negatively, similar to previous downturns in 2018 when homes took longer to sell.

How important is it?

The article's focus on declining sale prices and buyer negotiating power reflects immediate challenges influencing RDFN’s pricing strategy and market share.

Why Short Term?

The current data reflects immediate market conditions; however, the uptick in mortgage applications may lead to short-term recovery.

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-Pending home sales are down 1% year over year while new listings are still rising, giving buyers negotiating power SEATTLE--(BUSINESS WIRE)--(NASDAQ: RDFN) — Just over 28% of U.S. homes are selling above the asking price, down from 32% a year earlier, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the lowest level for this time of year since 2020, when the start of the pandemic ground the housing market to a halt. That’s one signal of the shift toward a buyer’s market in much of the country. For the sake of comparison, more than half (53%) of homes sold above list price during this period in 2022, when the housing market was heavily favoring sellers. The share of homes selling above asking price has fallen year over year in all but five of the most populous U.S. metro areas; San Jose, CA, Anaheim, CA, and Oakland CA saw the biggest declines, though more than half of homes are still selling above asking price in San Jose and Oakland. Here are some other data points illustrating the tilt in buyers’ favor, and the slower-than-usual spring market (data is from the 4 weeks ending June 8): Pending U.S. home sales fell 1.1% year over year to their lowest level for this time of year in Redfin’s records. Just over one-third (37.6%) of homes went under contract within two weeks, the lowest level for this time of year since 2020. There has been a big gap between the median list price and the median sale price for the last several weeks. The median sale price was $397,000, a $28,950 discount (-7%) from the median list price of roughly $425,950. For comparison, the median sale price was typically much higher than the median list price when the market was favoring sellers in 2021 and early 2022. Prospective homebuyers are sidelined by widespread economic uncertainty and high housing costs. The median monthly housing payment is just $29 shy of its record high, with mortgage rates near 7% and sale prices up 1.6% year over year (though sale prices are lower than list prices). “It’s still tough for many Americans to buy a home, as affordability remains a real challenge, but house hunters should know that sellers are accepting offers below asking price and giving concessions to get deals done,” said Chen Zhao, Redfin’s head of economics research. “Buyers have negotiating power, especially if they’re flexible on timing or location, or if they’re willing to take on a fixer upper. Buyers should negotiate, and be prepared to move on to other homes if a seller is unwilling to meet them halfway; they may be able to get a better deal elsewhere.” On the selling side, new listings are up 5.2% year over year. There are many more home sellers than buyers in the market. But it’s worth noting that mortgage-purchase applications are up 10% week over week, signaling that pending home sales could improve soon. For Redfin economists’ takes on the housing market, please visit Redfin’s “From Our Economists” page. Leading indicators Key housing-market data To view the full report, including charts, please visit: https://www.redfin.com/news/housing-market-update-fewer-homes-selling-above-asking-price About Redfin Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people. Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®. For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here. More News From REDFIN

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