With home prices and mortgage rates rising, this is leading to more potential buyers being priced out of the market. One positive sign for home buyers as we head into the spring buying season is that the number of new listings has risen 8% year-over-year. However, as the number of listings has grown slightly, so has the demand from buyers. Therefore, the net effect from these trends is a 13% reduction in active inventory year-over-year.
An increase in price reductions
With more buyers being priced out due to higher skyrocketing home values combined with rising mortgage rates, some sellers are having to adjust their expectations. An indicator of these market dynamics is typically observed based on the frequency of price reductions for active listings. During the four weeks ending on April 3rd, approximately 12% of all homes for sale had a price drop. When comparing this figure to the same time period last year, this was an increase of approximately 3%. Although this difference may not sound significant, it actually is. In fact, the number of price drops for this time of the year is actually the most that we have seen since 2015. Needless to say, this is quite likely the early signs of some stabilization in the housing market. Although most economists predict home prices to continue to rise this year, they should do so at a much more gradual pace.
It should be noted that price drops are still rare in this market. However, the fact that they are ticking up in frequency is a sign of the market normalizing some. Although there is still plenty of buyer demand in the market, it is even more important for sellers not to have a “sky is the limit” approach when pricing their properties for sale. As always, pricing a property appropriately based on recently closed sales will result in not only more activity, but also more offers. Furthermore, your property will be more likely to experience a bidding war as well.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!