More than 60% of Boise Home Sellers Dropped Their Asking Price in June Amid Cooling Market
July 14 2022 - 8:00AM
Business Wire
Home sellers are contending with apprehensive
buyers amid rising mortgage rates and the possibility of an
oncoming recession
(NASDAQ: RDFN) — Nearly two-thirds (61.5%) of homes for sale in
Boise, ID had a price drop in June, according to a new analysis
from Redfin (www.redfin.com), the technology-powered real estate
brokerage. That’s the highest share of the 97 metros in the
analysis. Price drops have become a common feature of the cooling
housing market, particularly in places that were popular with
homebuyers earlier in the pandemic.
Next came Denver (55.1%) and Salt Lake City (51.6%), each metros
where more than half of for-sale homes had a price drop. They were
followed by Tacoma, WA (49.5%), Grand Rapids, MI (49.3%) and
Sacramento (48.7%). Seattle (46.3%), Portland, OR (45.7%), Tampa,
FL (44.5%) and Indianapolis (44.1%)–all of which saw price cuts for
nearly half the for-sale homes–round out the top 10.
Boise also had the biggest increase in the share of listings
with price drops from a year earlier, when 25.7% of sellers cut
their price. Denver, Salt Lake City and Grand Rapids were also
among the 10 metros with the biggest upticks from a year
earlier.
Boise, Salt Lake City, Sacramento and Tampa were popular during
the pandemic with homebuyers moving in from pricey coastal job
centers, taking advantage of low mortgage rates and remote work.
Their popularity led to heated competition for a limited supply of
homes for sale, pushing up prices and making them unaffordable for
many buyers. In Boise, for instance, the typical home sold for
$550,000 in May, up more than 60% from two years earlier. Home
prices increased 44% to $610,000 in Sacramento. Mortgage rates
nearly doubling to almost 6% in the first half of 2022 priced even
more buyers out.
“Home sellers are contending with a rapidly changing market,
especially in places where they’re used to their neighbor’s homes
getting multiple offers and selling for more than asking price,”
said Redfin Senior Economist Sheharyar Bokhari. “Higher mortgage
rates and a potential recession are causing prospective buyers in
popular migration destinations to press the pause button, and
they’re also having a big impact on workers in big job centers who
rely on their stock portfolio for down payments. In places like
Denver, Seattle and Portland, some buyers feel less confident about
their finances in the face of a shaky economy and faltering stock
market. Sellers are adjusting their expectations in real time as
they realize they may not get the price their neighbor got two
months ago.”
“If demand plateaus in the coming months, price cuts are likely
to be less common as sellers realize the market has shifted and
price realistically from the start,” Bokhari continued. “But if
demand falls further, sellers will continue to play catch-up and
cut prices to attract buyers.”
Over 25% of home sellers dropped their price in
three-quarters of U.S. metros in June
More than three-quarters of the metros in Redfin’s analysis saw
over 25% of home sellers drop their asking price in June. More than
10% of home sellers dropped their price in all of the metros.
In El Paso, TX, 13.3% of home sellers dropped their asking
price, a smaller share than any other metro. Newark, NJ (14.1%),
Honolulu (16.8%), Milwaukee (17.4%) and New Brunswick, NJ (17.8%)
come next. New Haven, CT (17.9%), McAllen, TX (18.1%), Elgin, IL
(18.5%), Chicago (18.8%) and Miami (18.8%) round out the top 10.
The relatively small share of price drops is likely largely because
homes in most of those metros are affordable: In six of the 10, the
typical home costs less than the national median.
The share of homes with a price drop rose from a year earlier in
all but four metros, three of which are in Illinois. The share
declined in Elgin, IL, Lake County, IL, Chicago and Fresno, CA.
To read the full report, including additional metro-level data,
visit:
https://www.redfin.com/news/price-drops-cooling-market-june-2022
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220714005267/en/
Redfin Journalist Services: Erin Osgood, 206-588-6863
press@redfin.com
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