The market we have been used to so far that was defined by rising home prices, bidding wars, a lack of inventory, and sellers having the upper hand in negotiations may be changing. We have recently experience a few signs of the market shift to buyers, but we are still a long way from a full shift.
While the numbers are still higher then years past, economists are seeing a slowing growth in the percentage increase. Last year, median home list prices increased by 10 percent, the year before that 9 percent.
A recent report from real estate brokerage Redfin revealed to us that 1 in 4 sellers dropped their asking price. The areas seeing the biggest shift are Atlanta; San jose, Calif.; Seattle; and Las Vegas
“We’ve hit that tipping point in a lot of these cities where what sellers think they can get is just not possible for many buyers,” Daren Blomquist, senior vice president at ATTOM Data Solutions, told realtor.com®. “Now the pendulum is swinging away from sellers and back toward buyers.”
Economists are saying the housing affordability is the culprit for the slowdown. The mortgage rates are up 0.82 percent since a year a go. The fixed-rate mortgage averaged 4.65 percent as of September 20. Each percentage increase can translate to about $143 more every month on the mortgage payment, or $51,500 over the life of a loan on a $300,000 priced home, according to realtor.com®.
Home prices have just gone up too fast, but that does not mean it’s going to crash the market, it does mean that there are limits to what people can afford.