There is no doubt that home buyers have faced challenges in the recent years. Skyrocketing prices, a lack of inventory, and bidding wars are just a few of these challenges. Fast forward to 2022 and out-of-control inflation resulting in rapidly rising mortgage interest rates are only compounding the problem now. With this said, there could be some hope for prospective home buyers as the market has cooled off considerably.
More room for negotiations
With the recent run up in mortgage interest rates, we have seen a dramatic slowdown in the housing market. Of course, the primary reason for this is because even more prospective buyers are now being priced out of the market due to higher mortgage interest rates. With this said, this is resulting in homes staying on the market for longer periods of time and thus having to reduce their prices. In fact, on average, U.S. homes purchased during a four-week period in August sold for less than what sellers were asking. We have not seen this trend since at least March 2021. As a result, we are not seeing bidding wars taking place to the extent that we saw even as recent as the first quarter of this year.
The average sale-to-list price ratio is a measure of how closely homes are selling to their asking prices. As of the four weeks preceding August 28th, 2022, this figure fell to a national level of 99.8%. For perspective, this ratio was 101.4% at this time last year. In other words, on average, homes were selling above their asking prices.
On average, 7.5% of homes listed for sale during the month of August 2022 had a price decrease each week. Although this figure is certainly much higher than what we have seen for the past few years, we also are still seeing homes in certain markets receiving multiple offers. Furthermore, approximately 30% – 37% of homes sold for more than their asking price in the month of August. Although this is less than the 50% figure that we saw a year ago, it does show that certain markets are still garnering a lot of buyer interest. Perhaps one of the best examples of housing markets still garnering interest is the South Florida market. Are you looking to move to South Florida? We can help. Contact Natasha at Live South Florida Realty, Inc. today! Be sure to download the free Florida Home Search app to have the most up-to-date MLS data right on your mobile device!