Yasmin Asberry anticipated that the process of selling her home in a Dallas suburb would be straightforward. After several months of minimal interest, she reduced the price on two occasions and was close to retracting the listing when she ultimately received a satisfactory offer. “When we first listed it, we were under the impression that there was still enthusiasm among buyers for homes and that they were being acquired quite rapidly,” she said. “However, the number of hits we received was quite limited.” Asberry’s experience illustrates a housing market ensnared in a stalemate. In the aftermath of the pandemic-induced housing surge, the market is currently experiencing a downturn. Numerous homeowners, tethered to expectations formed during the pandemic, are increasingly reluctant to adjust their asking prices significantly or to accept expensive concessions, even as the housing market shifts towards a more favorable position for buyers. Instead, they prefer to withdraw their listings or allow transactions to collapse. Buyers are increasingly prepared to disengage from transactions.
In September, 80% of markets experienced price increases, marking the highest proportion in nine months, driven by cities in the Northeast and Midwest. The costs associated with borrowing are significant factors to consider. Millions of Americans locked in ultra-low mortgage rates during the pandemic, which they are reluctant to trade for the current, elevated rates, according to Daryl Fairweather. “For sellers, their alternative to selling their home is to remain in their residence with exceptionally low mortgage rates,” Fairweather stated. “Many sellers who are not achieving their anticipated prices are opting to delist their properties, or they are maintaining their listings for extended periods, with the hope that market conditions will shift or that a buyer will emerge willing to meet their elevated price expectations. That strategy is ineffective, as buyers are confronted with elevated mortgage rates, making it increasingly difficult for them to manage both high prices and high rates,” she added. Upon acknowledging the sluggishness of the market, Asberry reached a compromise. She initially listed her home in a Dallas suburb at $400,000, a figure derived from the analysis of comparable properties in the vicinity. Following the addition of new furniture and the retaking of her listing photos, she reduced the price to $385,000, subsequently lowering it again to $365,000, before ultimately receiving an offer.
“That was it,” Asberry stated. “We would have just gone off the market if they didn’t agree to $365,000,” she stated, noting that she would have intended to relist her home in the spring, anticipating a more favorable market condition. Recent housing market data indicates a “disconnect” between home buyers and sellers, according to Fairweather. According to data, there were more listings withdrawn from the US market this summer compared to the previous year. Indeed, delistings have surpassed levels observed throughout the previous year. In August, the cancellation rate for purchase-agreement contracts reached approximately 15% of homes, representing the highest level recorded for that month, as reported by Redfin. Angie Guillette, a real estate agent in southwest Florida, noted that sellers who demonstrate a greater willingness to reduce their list prices are currently the ones achieving sales success. “We have a considerable number of sellers who, when they do not achieve the price they anticipated — often a figure influenced by the pandemic — will remove their property from the market and opt to wait,” Guillette stated. These sellers prefer to exit the market rather than reduce their prices, which contributes to the maintenance of elevated overall prices, she noted.
The divergence in expectations operates in both directions. A report indicated that home buyers are terminating agreements at an unprecedented rate. In August, approximately 56,000 home-purchase agreements in the United States were annulled, representing roughly 15% of the homes that entered into contract during that month. The report indicates that this represents the highest rate recorded for August. Inspections represent a critical juncture where numerous transactions fail to materialize. The report indicates that an increasing number of buyers are demanding that sellers address repairs or provide additional concessions, while sellers are resisting these requests. Heather Anschuetz, Tennessee, observed that buyers are increasingly inclined to disengage from transactions. “There is an abundance of options available in the market for consumers to select from at this time,” she stated. “(And) many buyers exhibit increased caution in assuming additional financial commitments, particularly when their budget is already stretched to its limits with their current monthly mortgage obligations.”
Asberry indicated that she had to reduce the price of her Dallas-area home more than she had anticipated; however, she successfully negotiated with the buyers to avoid incurring any further repair costs. Nevertheless, the reduction in price resulted in the proceeds from her sale not being sufficient to fully finance her relocation to Washington state. “We had to utilize credit for the expenses associated with the move.” That amounted to $15,000, which is nearly equivalent to the reduction we had to make to our asking price once we received the offer,” she stated. Anschuetz noted that she frequently observes sellers who are open to negotiating on price, yet are inflexible regarding repairs — or the opposite scenario. “Even though my sellers are prepared to enter the market, they are looking to do so at a fair price,” she stated. “It’s not a fire sale.” It is unlikely that access will be granted indiscriminately to all who express interest.