More delistings show buyers may have reached their limit on price

This article was shared here with permission from Mike DelPrete for Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

The number of homes listed for sale and then delisted — taken off the market without selling — is rocketing to all-time highs.

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Why it matters: Rising delistings are a sign of a pricing imbalance, with asking prices higher than what buyers are willing to pay.

• National delistings, as a percentage of total listings, are roughly double the normal rate, bucking seasonal trends, and accelerating rapidly.

It all starts with pricing — and new listings coming to market are being priced very high.

• The median price per square foot on new listings is at record highs.

Another sign of a pricing imbalance are price drops, the number of which are also rising.

• The percentage of active listings with price reductions is higher than it’s been for years, and is increasing.

And for the houses that are selling, it’s taking longer.

• The median number of days on market is slowly increasing and is higher than past years.

The bottom line: The surge of new listings coming to market are overpriced, leading to a rapidly increasing number of delistings and price drops.

• This is the start of a price correction; sellers are bringing more inventory to market, but with “aspirational pricing” that buyers are not willing to pay.
• The record number of pricing corrective measures will likely lead to an overall correction – lower prices – as supply and demand continues to rebalance.