U.S. Housing Market Dynamics Are Slowing and Shifting to Buyers’ Advantage
Prices are coming down while inventory ticks up, creating fewer bidding wars
BY V.L. HENDRICKSON
9/04/2021
CRAIG TIDBALL
The U.S. housing market showed signs of normalizing in August, with more homes coming on the market and price growth slowing, according to a report Thursday from realtor.com.
New listings ticked up 4.3% year over year in August, although inventory was down 25.8% compared to the same time in 2020, the data showed. That’s an improvement compared to July, when inventory was down 33.5% annually.
In addition, asking prices did not rise as quickly in August. The median listing price registered an 8.6% year-over-year price increase in August, to $380,000, down from July’s record price of $385,000, the report found. However, it’s also nearly 20% more than August 2019.
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“Low mortgage rates have motivated homebuyers to endure this year’s challenging market and now some buyers are starting to see their persistence pay off,” Danielle Hale, chief economist at realtor.com, said in the report.
Sellers also “began adjusting listing prices to better compete with an uptick in inventory,” she continued.
Indeed, the number of sellers who adjusted the price of their listing was up 0.7% last month compared to August 2020, the data showed. That means 17.3% of active inventory has seen a price change.
“It’s still a strong seller’s market, with homes selling quickly at record-high prices,” Ms. Hale said. “But now a home priced well and in good condition may see two or three bids compared to 10 last year. For sellers not seeing as many offers, it may be worth revisiting pricing strategies as buyers continue searching for homes that fit their budgets.”
There were price gains of more than 10% in 18 of the 50 largest metro areas in the U.S., according to the reporter. Austin, Texas, was in the lead with 36% growth, followed by Las Vegas, 22.9%; Tampa, Florida, 20%; Riverside, California, 17.6%; and Orlando, Florida, 15.4%.
It Took Homes 11 Days To Sell In Denver In August. That Might Be A Sign That The Market Is Slowing
By Sarah Mulholland
9/04/2021
Home sales in the Denver metro are slowing, giving some buyers a chance to jump into what has been a highly competitive market for more than a year.
In August, houses sat on the market for an average of 11 days, according to a new report from the Denver Metro Association of Realtors. That may not sound like a lot, but it’s an increase from nine days in July.
And, earlier this year, homes were routinely going into contract within three to four days of being put on the market in the metro area, which includes Boulder and Broomfield counties.
Buyers typically move slower in late summer as families settle in for a new school year, Andrew Abrams, chair of the real estate association’s trend committee and a realtor in the area, noted in the report.
“They are a bit more patient, wanting to find the right house for the ‘right’ price,” Abrams wrote.
How long it takes to sell a home depends on its price, with less expensive homes selling faster than more expensive ones. A home with a price tag that is less than $500,000, for example, might be on the market for nine days, while a home priced in the $750,000 to $1 million range might sell in 16 days.
In August, the median price for a home in Denver was $540,000, which was about the same as July. But that’s 17 percent higher than it was a year ago.
It’s too early to tell whether the recent slowdown is due to seasonal patterns or the housing market beginning to correct itself after a boom that drove double-digit price gains across much of the state and the country.
“Sellers have basked in the control seat for so long that it can be hard to set reasonable expectations,” realtor Amanda Snitker wrote in the report, advising homeowners to prepare for a slower sales process.
While sellers might not be getting multiple bids in one weekend, low interest rates and a lack of homes for sale are still fueling a tight housing market.
A record-low 3,582 homes were listed last month in metro Denver, marking a 35 percent decline from the same time in 2020, according to the report. Typically, there are about 16,000 homes for sale in August, though that number topped 31,000 homes in 2006 — a record high.
So far this year, Denver home sales have totaled more than $25.5 billion, a 25 percent jump compared to this time last year, and about five percent above sales volume in August 2019. The pandemic shifted the normal ebbs and flows of the housing market, halting sales in the spring and early summer of 2020, and pushing them into the colder months.
