Homes are selling below the list price and the expected slowdown after Labor Day might be worse than expected

Unlike earlier this year, homes are selling below the list price and the expected slowdown after Labor Day might be worse than expected. 

With homes selling below their list price for the first time in nearly 1.5 years, the cooldown in the real estate market is continuing. Home Sellers are selling their homes below their initial list price. In fact, many are reducing their price over and over.

Despite the market starting to change from a strong seller's market to a neutral market, homebuyers should be happy and gobbling up homes. But they are not. In fact, mortgage applications and pending sales have seen significant declines in the past 12 months.  This can be attributed to another spike in interest rates and more expected to come. Homesellers are following the script and not putting their homes on the market. Total listing inventory and new listings have seen sharp declines recently.

There was an expectation of a steeper slowdown after Labor Day, but the indicators point to a much steeper slowdown than expected. 

Leading Indicators of Homebuying Activity:

• 30-year mortgage rates rose to 5.66%. That is up from 3.22% this spring.
• Searches for "homes for sale" on Google were down 26% from last year this time.
• Mortgage purchase applications were down 23% from the same time last year.
• The request for home buyer real estate services is down over 15%  from the same time last year. 

What does this mean to you? The bad news is this slowdown points to the market getting much worse before it starts to improve. 

If you are thinking of selling, it is really important to choose the right REALTOR and the right price.

If you are thinking of buying, that is good. You should not get hung up on ridiculous inflated sales prices, high mortgage rates, or unreasonable terms. Get a strong pre-approval, choose a knowledgeable REALTOR and remember, you can always refinance when the interest rates become more favorable to you.

Need help? Let's talk . . . . (913) 712-9313.