Home sellers across the U.S., especially in areas that have seen significant pandemic-induced population increases, dropped their prices last month to adjust to weakening demand, according to a Redfin report released Tuesday.
Throughout the 108 metros the Seattle-based firm tracked, more than 10% of sellers reduced their listing prices in May. The cuts were most pronounced across medium-sized metro areas in the West, according to the report.
The increasing price cuts reflected the market cooling effects of rising mortgage rates, Redfin said.
The area that saw the largest share of price cuts was Provo, Utah, where 47.8% of homes for sale took a price reduction in May. It was closely followed by Tacoma, Washington, with 47.7% and Denver, with 46.9%.
Salt Lake City; Sacramento, California; Boise, Idaho; Ogden, Utah; Portland, Oregon; Indianapolis; and Philadelphia, rounded out the top 10, each with more than 40% of homes on the market seeing discounts, according to the report.
Four of these metros—Provo, Salt Lake City, Boise and Ogden—were also among the 10 places where prices increased most during the pandemic. In Boise, home prices rose 66.7% from May 2020 to a median of $550,000 in May 2022, the largest increase among the metros tracked, Redfin said.
“Some buyers are no longer able to afford the home they want because mortgage rates have increased so much. There aren’t nearly as many people moving into the Boise area now that prices have gone through the roof,” Shauna Pendleton, a Redfin agent in Boise, said in the report.
“Ironically, a lot of Boise newcomers are now leaving because the quiet, slow-paced lifestyle that drew them here doesn’t exist the way it did before so many people moved in. Those people are cashing in on their equity to move to more affordable areas, mainly in the Midwest,” she continued.
By: Fang Block I Mansion Global I June 2022