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More Than 40% of Home Sellers Are Dropping Their Prices in Salt Lake City, Boise, Sacramento and Other Pandemic Hot Spots.

By Al_Sharpton_for_President follow Al_Sharpton_for_President   2022 Jun 22, 1:24pm 546 views  30 comments           share      

Sellers are adjusting their expectations as they realize many buyers are no longer able to afford the type of home they could have before mortgage rates shot up.

An increasing share of home sellers are lowering their asking price as rapidly rising mortgage rates cut into buyers’ budgets and homebuying sentiment drops. Price drops are especially common in mid-sized metros in the West–particularly in Utah–many of which had outsized price growth during the pandemic because they were hotspots for people moving in from other parts of the country.

Nearly half (47.8%) of homes for sale in Provo, UT–located about 45 miles away from Salt Lake City–had a price drop in May, the highest share of the 108 metropolitan divisions in this analysis. Tacoma, WA, had about the same share of price cuts, at 47.7%. Next come Denver (46.9%), (Salt Lake City 45.8%) and Sacramento (44.3%). Boise, ID (44.2%), Ogden, UT (42.6%), Portland, OR (42%), Indianapolis, IN (41.9%) and Philadelphia (41.2%) round out the top 10.

Provo, Boise, Salt Lake City, Sacramento and Ogden were also the top five metros with the biggest increase in the share of listings with price drops from a year earlier. Roughly 12% of listings in Provo and Boise had a price drop in May 2021, and it was around 20% in Salt Lake City, Sacramento and Ogden.

All in all, about half (53) of the metros in this analysis saw more than 25% of home sellers drop their asking price in May. More than 10% of home sellers dropped their price in all 108 metros, driving the national share of price drops to a record high.

The uptick in price drops is symbolic of the slowdown in the housing market. Many buyers are backing off amid skyrocketing home prices, surging mortgage rates, high inflation and a faltering stock market.

“There are two kinds of sellers in today’s market: Those who already know the market has cooled, and those who are learning about the cooling market as they go through the selling process,” said Redfin Chief Economist Daryl Fairweather. “The former wants to sell quickly before the market slows further and they’re willing to price slightly below comparable homes in their neighborhood right away, and the latter may have to drop their price if their home doesn’t attract buyers within a few weeks. As more sellers come to terms with the slowing market, fewer homes will have price drops.”

Sellers are adjusting expectations in Salt Lake City, Boise

Four of the 10 metros with the highest share of price drops–Provo, Salt Lake City, Boise and Ogden–are among the 10 places where prices increased most during the pandemic. Prices shot up 65.7% to $550,000 from May 2020 to May 2022 in Provo, They rose 56.2% to $556,000 in Salt Lake City, 66.7% in Boise to $550,000 and 57.2% to $500,000 in Ogden.

The soaring prices were largely due to out-of-town homebuyers moving in during the pandemic, competing with locals for a limited supply of homes. Migration into both Boise and the Salt Lake City metro area–which includes Provo and Ogden–nearly tripled throughout 2020. The trend has started to reverse in both places, with Salt Lake City seeing a net outflow (more Redfin.com users looking to leave than move in) for the first time on record in the first quarter.

“Many buyers are backing out of the market–and even backing out of deals–and some sellers are responding by dropping their price,” said Boise Redfin agent Shauna Pendleton. “Some buyers are no longer able to afford the home they want because mortgage rates have increased so much. There aren’t nearly as many people moving into the Boise area now that prices have gone through the roof. Ironically, a lot of Boise newcomers are now leaving because the quiet, slow-paced lifestyle that drew them here doesn’t exist the way it did before so many people moved in. Those people are cashing in on their equity to move to more affordable areas, mainly in the Midwest, where they can get more for their money–in some cases, they can even pay all cash.”

The share of homes with a price drop increased from a year earlier in 102 of the 108 metros in this analysis. It declined in six metros, three of them in Illinois: McAllen, TX, Elgin, IL, Chicago, Fresno, CA, Lake County, IL and Springfield, MA.

https://www.redfin.com/news/price-drops-increase-may-2022/

1   1337irr   2022 Jun 22, 1:32pm  

I think we are going to see a bit more of a drop off...I think people are underestimated market share of hard money lenders. The search term is declining.

https://trends.google.com/trends/explore?date=today+5-y&geo=US&q=private+money+lenders
2   Eric Holder   2022 Jun 22, 1:34pm  

Nooooooooooooooo!
3   HunterTits   2022 Jun 22, 1:49pm  

HunterTits says

WineHorror1 says



$18,000 is a big price drop?


For a $400k home, yes.

Esp since our resident RE 'experts' claimed that none of this should be happening.

@WineHorror1
4   Bd6r   2022 Jun 22, 1:55pm  

How many times do I have to tell y'all that you are misspelling pLandemic!!!
5   Booger   2022 Jun 22, 1:59pm  

More Than 40% of Home Sellers Are Dropping Their Prices

ERECTION INTENSIFYING!!!
6   HeadSet   2022 Jun 22, 2:37pm  

Booger says

More Than 40% of Home Sellers Are Dropping Their Prices

ERECTION INTENSIFYING!!!

Even cooler when "Home Sellers Are Dropping Prices by 40%."
7   Blue   2022 Jun 22, 4:00pm  

I observed around that some homes are removed from listing after some time in the market.
8   HunterTits   2022 Jun 22, 4:20pm  

Blue says

I observed around that some homes are removed from listing after some time in the market.


Me too.
9   joshuatrio   2022 Jun 22, 5:08pm  

Yep. This rings true.

The house I just bought I got them to cut $70k off of list. When selling my home, I had to reduce the price about $30k.

Market is turning.
10   mostly reader   2022 Jun 22, 5:37pm  

I got out of a RE deal in Florida a month ago. I entered it, sort of, in the end of 2021. Back then I considered the possibility that things may change, but it still seemed like an OK diversification strategy. So I mentally committed and paid that refundable reservation fee to a builder for a new construction.

Scroll forward to May 2022. Builder's agent reaches out with an invitation to enter into a contract, and there's a catch: final price price is about 10% higher than the one announced at the time when I made the reservation (end of 2021). Because, see, "no inventory", "lots of interest", "global inflation", and "at no time was a price guaranteed during this reservation period". I won't quote the entire email, just another example of trying to put a positive spin on "we are screwing you" message and make you feel good in process.

I got out of it and recommended the agent that they sell it quick. Writing is on the wall but not everyone can see it yet. That was early May. Things were moving fast since.
11   porkchopexpress   2022 Jun 22, 6:05pm  

I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?
12   Ceffer   2022 Jun 22, 6:13pm  

porkchopexpress says


I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?

Just use it to live in for years and years and don't even think about it. Things will equalize in the long run, and tearing your hair thinking you can optimize based on speculation is silly.

Our house in tri valley dropped 10 percent when we moved in, now up 500 percent although its been a while.
13   porkchopexpress   2022 Jun 22, 6:15pm  

Ceffer says


porkchopexpress says


I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?

Just use it to live in for years and years and don't even think about it. Things will equalize in the long run, and tearing your hair thinking you can optimize based on speculation is silly.

Thanks Ceffer. That's how I plan to think about it, as a home to live in. Plus, renting was the same price as my total monthly house payment all in.
14   mostly reader   2022 Jun 22, 6:20pm  

porkchopexpress says

I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?

If I were in a contract for primary residence, I'd let things run their course and wouldn't change the trajectory. It's doubtful that things will get nearly as bad as in 2008.
15   B.A.C.A.H.   2022 Jun 22, 7:00pm  

porkchopexpress says

a home to live in

Pork Chop, congratulations on your move. We may leave some time. I am interested in how people choose where they leave to. You already shared that with us.

Please share a report card post about your relocation after you've been there a year or so.
16   pudil   2022 Jun 22, 7:08pm  

What’s the yoy price decrease?
17   FortwayeAsFuckJoeBiden   2022 Jun 22, 9:03pm  

porkchopexpress says

I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?


property taxes require lube every year. just don’t forget to pay those, gets bad if you are late. meet your neighbors, make friends.
18   1337irr   2022 Jun 22, 9:29pm  

FortwayeAsFuckJoeBiden says

porkchopexpress says


I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?


property taxes require lube every year. just don’t forget to pay those, gets bad if you are late. meet your neighbors, make friends.

Always protest, always appeal. That's what I am doing and the ex-county appraiser is helping me with my property taxes.
19   porkchopexpress   2022 Jun 22, 9:55pm  

B.A.C.A.H. says

porkchopexpress says


a home to live in

Pork Chop, congratulations on your move. We may leave some time. I am interested in how people choose where they leave to. You already shared that with us.

Please share a report card post about your relocation after you've been there a year or so.
Thanks! I will report back. We drive away from San Diego on June 29th and are making a vacation road trip out of it. I'm already ordering all new vinyl flooring throughout. Excited to make this a money pit lol
20   porkchopexpress   2022 Jun 22, 9:56pm  

FortwayeAsFuckJoeBiden says

porkchopexpress says


I'm closing on my first family home on Friday or Monday. Shall I apply lube or take it raw?


property taxes require lube every year. just don’t forget to pay those, gets bad if you are late. meet your neighbors, make friends.
Actually, TN property taxes are dirt cheap. On a $1.1M home, it's only like $280/month. Ridiculous.
21   Eman   2022 Jun 22, 10:02pm  

pudil says

What’s the yoy price decrease?


This won’t show up until a few months out. Data for April, May, likely June and even July or August will likely show YoY price increase.
22   ad   2022 Jun 22, 10:03pm  

Al_Sharpton_for_President says

Four of the 10 metros with the highest share of price drops–Provo, Salt Lake City, Boise and Ogden–are among the 10 places where prices increased most during the pandemic. Prices shot up 65.7% to $550,000 from May 2020 to May 2022 in Provo, They rose 56.2% to $556,000 in Salt Lake City, 66.7% in Boise to $550,000 and 57.2% to $500,000 in Ogden.


So it went up from around $356,000 to $556,000 in Salt Lake City from May 2020 to May 2022. It likely will drop at least 30% to $389,000. Almost all the COVID pandemic gains will be wiped out for speculative assets (stocks, housing, crypto, etc). I think the Fed wants to see housing prices bottom about 5% t 7% above early 2020 home price levels.
.
25   exfatguy   2022 Jun 23, 11:35am  

HunterTits says

Patrick says


https://nypost.com/2022/06/22/jp-morgan-reportedly-laying-off-hundreds-in-mortgage-business/


But that can't be true!


Who needs a mortgage anymore? Doesn't everyone but me have millions in cash?
26   Ceffer   2022 Jun 23, 11:37am  

exfatguy says

Who needs a mortgage anymore? Doesn't everyone but me have millions in cash?

They printed up a trillion to promote the plague and destroy the country. Didn't you get your share?
27   exfatguy   2022 Jun 23, 11:43am  

Ceffer says

exfatguy says


Who needs a mortgage anymore? Doesn't everyone but me have millions in cash?

They printed up a trillion to promote the plague and destroy the country. Didn't you get your share?


Dammit, I must have been absent that day!
28   HunterTits   2022 Jun 23, 12:07pm  

Ceffer says


Didn't you get your share?


Nope. I am too white and too male..

...as determined by ppl who claim they are color blind and not biologists, too.
29   ad   2022 Jun 23, 12:19pm  

If I want to buy a starter home for $500,000 at a 30 year mortgage rate of 3%, then my monthly payment is $2108. The bank determined I can afford that monthly payment.

Now with the rate at 6%, my monthly mortgage is $2998.

The home price would have to come down to $360,000 in order for the monthly payment to be near $2108 (for the 6% rate).

That means a drop of $140,000 (from $500,000 to $360,000 or 28%).

That is why I am figuring housing prices need to come down about 30%.

I think in a way the Fed is doing this to bring housing prices back to just above 2020 levels. They’ll keep rates steady for a while and then make adjustments as necessary.

For the ones who bought at 3% interest rate for a mortgage in 2020 to 2021, I don’t think this matters much if they plan on staying in their homes for at least 7 years.
30   SunnyvaleCA   2022 Jun 23, 5:25pm  

exfatguy says

Who needs a mortgage anymore? Doesn't everyone but me have millions in cash?

They used that to buy Bitcoin on margin a few months ago. So... nope!

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