Inventory is easing in some of the hottest markets, and according to Redfin, this means homebuyers may be able to be a little more selective. Redfin notes that sellers are dropping their prices as supply constraints begin to ease, and in the last four weeks, 26.6 percent of homes listed for sale had a price drop. This is the highest drop since 2010.
After years of strong price growth and intense competition for homes, buyers are taking advantage of the market's easing pressure by being selective about which homes to offer on and how high to bid," said Taylor Marr, Redfin Senior Economist. "But there are some early signs of a softening market, and the increase in price drops may be another indicator that sellers are going to have trouble getting the prices, and the bidding wars, that they may have just months ago. Instead, many are finding their homes are sitting on the market without much interest until they start reducing their prices."
Year over year, the share of sellers who dropped their prices increased 4.8 percentage points, from 21.7 percent in 2017 to 26.6 percent in 2018. Redfin found that the largest increase in the share of price drops could be found in Las Vegas, San Jose, Seattle, and Atlanta.
Las Vegas reported price increases of 12.3 points to 28.1 percent, the highest of the major markets. In San Jose, prices rose 10.7 pointts to 25.7 percent. Seattle saw a similar increase 10.1 pts to 37.1 percent, while Atlanta jumped 9.0 points to 27.9 percent.
Redfin’s Housing Demand Index identified easing inventory concerns as one of the major factors behind the nationwide price drops.
"In a market where we're seeing more inventory, sellers may choose to use price reductions to continue to generate interest in their home for sale," said Jessie Culbert, a Redfin agent in Seattle. "Ultimately, the market dictates the appropriate price for any given home. We use data and on-the-ground insight to recommend the initial price, but sometimes we just need more exposure to the market, or more time to hear feedback, and then we'll work with our clients to adjust the price accordingly."
Find the full report from Redfin here.