For the first time in two years, the median time a home spends on the market has increased. During the four-week period ending on July 17, typical homes sold spent 19 days in the market, up one day from a year prior, according to a report from Redfin published on Thursday.
In addition, 41% of homes that went under contract had an accepted offer within the first two weeks the market, down from 46% a year ago, and 28% of homes that went under contract had an accepted offer within the first week, down from 46% a year prior.
“Buyers, who earlier this year had to race to beat the competition, can now take their time touring homes and perhaps even wait to see if sellers drop the price,” Daryl Fairweather, Redfin’s chief economist, said in a statement.
As the Federal Reserve continues to tighten monetary policy in an effort squelch inflation, home buyers are losing purchase power, forcing some home seller to drop their prices.
The report found that 7.3% of homes for sale each week during the four-week period had a price drop, the largest share Redfin has recorded since it began tracking the metric in 2015.
Despite this, 49% of homes still sold above list price, however this is down from the 54% recorded a year ago. Additionally, the average sale-to-list price ratio was down from 102.2% a year prior to 101.4%.
Year over year, Redfin found that the median home sale price increased 11% to $389,000. However, the year over year price growth rate is down five percentage points from its March peak of 16%.
Similarly, the median asking price was also still showing a year-over-year increase, rising 14% to $396,448, but it is down from the all-time high set during the four-week period ending May 22.
Although the total number of homes for sale posted its biggest increase yearly since August 2019, rising 3%, the number of new listings dropped 3% during the time period compared to a year ago.
“Still, few homes are being listed, so if your dream house hits the market, you should negotiate hard, now that you have the power to. The value may fall in the near term, but if you plan to live there for five or 10 years you will almost certainly gain home equity over that horizon,” Fairweather said.
As yet another sign of slowing market conditions, Redfin found that Google searches for homes for sale were down 23% year over year for the week ending July 16, and ShowingTime found that touring activity as of July 10 was down 2% from the start of the year. In comparison, by July 10, 2021, showing activity had risen 22% since the start of the year.
“Sellers, on the other hand, may want to list sooner rather than later, before prices fall more,” Fairweather said.
