Housing tipping back to a buyer's market as sellers cut prices
Housing market shifting to buyer's market
After several years of home price gains, the market appears to limit to what people can afford. Sellers are finally responding by lowering prices.
Approximately 14% of all listings in June had a price cut, according to a new Zillow report. In addition, home price growth is slowing in nearly half of the 35 largest U.S. metropolitan markets.
Rising mortgage rates and affordability are behind the drastic change. As the housing market recovered from its epic crash in the last decade, home prices began to gain slowly.
The simple reason was supply and demand. As millennials aged into their homebuying years, homebuilders did not met the rising demands. Millions of single-family homes lost to foreclosure were purchased by investors and turned into single-family rentals making the shortage in houses for sale inventory.Prices went up until NOW.
"The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly," said Zillow senior economist Aaron Terrazas. "A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsize price gains in recent years."
We can say that housing market shifting to buy's market
However, all real estate is local and certain markets are tipping faster than others. In San Diego, 20% of all listings had a price cut in June, in Seattle, which continues to be the hottest market in the nation, 12% of all listings had a cut, in Palm Beach County 10%, the largest share in nearly four years.
Bottom Line:Buyers are getting negotiating power back.