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Weakening homebuyer demand led to the highest rate of home price cuts since November 2022, according to a Redfin market report published Thursday.
Sticky mortgage rates and rising median home prices created a slower-than-usual spring homebuying season, with the age of inventory rising for the first time in eight months to a median of 46 days. Unsurprisingly, sellers began slicing asking prices — 6.4 percent of listings experienced a price reduction in May, leading median asking prices to decline $3,000 or 0.71 percent to $416,623.
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New listing growth has also slowed over the past few weeks, meaning buyers must be competitive with offers. The average list-to-sale ratio has barely budged compared to May 2023, only falling 0.2 percent to 99.5 percent, the data shows.
Median home prices, pending sales, and new listings are rising on the West Coast, however. San Jose saw double-digit annual increases in median home prices (+12.4 percent), pending sales (+13.7 percent) and new listings (+34.5 percent) in May. Anaheim, San Francisco, San Diego and Oakland, meanwhile, experienced gains in one or all of the metro-level indicators Redfin tracks.
On the other hand, Texas and Florida had the biggest declines in median home prices, pending sales and new listings. Fort Worth (-0.4 percent) and San Antonio (-0.3 percent) were the only major markets to experience median home price declines, while Houston (-15.1 percent) and West Palm Beach (-14.4 percent) had the most significant drop in pending sales.
Chicago had the biggest drop in new listings (-10 percent).
Christine Chang | Credit: Redfin
Although the market is sluggish, California-based Redfin Premier agent Christine Chang said there’s still plenty of competition for well-maintained and well-priced listings.
In the Bay Area, listings priced $1 million and under are still getting multiple offers, she said.
“People who are buying right now are typically doing so because they’re having a baby or looking for a more family-friendly home,” Chang said in a statement. “My advice for those buyers is to be open-minded: Consider single-family homes that are a bit outdated but don’t need major renovations, and/or homes in lesser-known, non-trendy neighborhoods.”
“That type of home tends to sit on the market longer, and buyers may be able to avoid competition and get a home for asking price instead of engaging in a bidding war,” she added. “Buyers who can get by with less space should consider a condo; they’re relatively unpopular right now and many are going under asking price.”
