It’s the same housing story across the U.S., according to real estate agents in three U.S. cities. Sellers are offering more concessions as buyer demand wanes and listings linger on the market.
"Gone are the days of, ‘hey, my next door neighbor just sold last year for $100,000 over list price.’ Sellers are absolutely having to negotiate," Dan O'Brien, an agent at Trueblood Real Estate covering Indianapolis, told Yahoo Finance (video above).
And that’s good news for buyers.
"Now, we actually have buyers that are being protected by contingencies, like inspection and appraisal," O'Brien said, “where a lot of times, those were out the window during the peak craziness of the COVID market."
Here’s what’s happening in Denver, Indianapolis, and Charlotte, N.C., according to these agents.
Denver housing slowed in December. The median sales price fell 4% year over year to $528,250. Amid the cooldown, buyers are taking their time shopping for homes and are asking for incentives. The sharp turn came after the Denver market soared 30% since March 2020.
"Right now, sellers are operating to help with the interest rate increase. So they are offering 2-1 buydowns," said Kathy Casey, a Coldwell Banker residential brokerage realtor in Denver. "What that means is for the first two years, your interest rate would be lower than the market rate right now."
However, the market is showing a potential shift.
"So we are already starting to see signs of the spring market, showing that it may be a heated market,” Casey said. "So go out, find a house that you like and you love.”
Similarly, housing activity in Indianapolis abated toward the end of 2022. Houses stayed on the market for an average of 22 days in December, compared with an average of just four days in May 2022.
"Buyer demand has certainly slowed down with those rising interest rates," said O'Brien. “Things are lasting a little bit longer on the market."
The rise in days on market is partly due to an increase in home supply. There were almost 1,600 more active listings in the city in December, a 26% year-over-year increase, according to Redfin.
"To put that in perspective, we just now broke the number where it was pre-COVID," O'Brien said. But "we are still low in inventory."
Buyers are still struggling with affordability concerns, though, as mortgage rates remain substantially higher than a year ago. Banks and sellers are stepping in to help.
"Different banks are offering different types of mortgage products to help with that increased mortgage rate." O'Brien said, "And sellers are offering a credit for a 2-1 buydown, or just in general, to buy down the interest rate to make that more affordable for a buyer."
Like other markets, Charlotte's sellers are providing inducements to make deals, especially paying for closing costs and buying down the interest rate, according to Sir Ashley Harrison, a real estate broker at the Harrison Group with Fathom Realty in Charlotte. Pricing, though, isn’t moving as much.
"We're seeing more inventory, but less new listings," Harrison said. "And we are getting a lot more seller concessions, but pricing has remained very sticky."
The number of homes sold in Charlotte declined in the last six months. Only 823 homes were on the market in December, a 42% plunge from a year ago. And homes stayed on the market for an average of 48 days in December, more than double the days in May 2022.
"Buyer demand has fallen off," Harrison said.
Rebecca is a reporter for Yahoo Finance.
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