House values ​​surge as sellers face increasing pressure to lower prices

U.S. housing list prices Industry experts say it hits the highest ever high and shows a potential shift into the buyer’s market.

A recent report from real estate company Redfin shows that in total, the value of US homes has increased by 20.3%, reaching a record $698 billion. This increase was driven by a combination of increased inventory, lower demand and higher household prices.

Daryl Fairweather, the chief economist at Redfin, told Fox Business that the market is poised for changing over the coming months as sellers outperform buyers.

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“All these houses are listed Really high pricethat’s why they sit in the market. But that’s why they’re retreating from the market as buyers can’t afford these high prices, Fairweather said, adding that mortgage fees, insurance costs and property taxes are high.

Fairweather noted that there are better options in the rental market as well.

As a result, homes sitting in the market will need to be marked down by price, while new homes listed will need to be priced more conservatively to get offers, Fairweather said. Otherwise, the seller must abolish or maintain the home on the bystander.

“It’s been a while since these people bought their homes. A lot of people have changed. The economy is changing. So I think more homeowners need to bite bullets and lower prices,” she said.

Noel Roberts, founder of Pending Pending, a real estate company specializing in off-market trading, told Fox Business that the seller’s “game is changing” as inventory continues to become more robust.

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According to Redfin, the lock-in effect of mortgage rates has been eased, and homeowners are trying to cash amidst economic uncertainty, reaching its highest level in five years, with the number of homes in the national market increasing 16.7% year-on-year in April, reaching its highest level in five years. The house is also on the market for a week longer than a year ago. According to real estate companies, the share of inventory that has been on the market for over two months has increased.

“Sellers can no longer rely on rarity. They can do heavy lifting. As inventory is built, sellers need to be smarter and more strategic playbooks,” Roberts said. This includes realistically pricing, presentation upgrades, and early targeting of the right buyers.

Meanwhile, according to Roberts, it offers opportunities for buyers with more room to negotiate.

“In some submarkets, this may be your first real opportunity for years to secure your home in favorable terms. You are no longer chasing your home with war bids. You are assessing your inventory with leverage,” he said.

He compared the current environment to “not much about fate, more about discipline.” Environmentally adapted sellers said that homes and buyers who maintain their activity are likely to find good value.

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The reason for the disconnect between what sellers expect and what buyers are willing to pay is because some homeowners are trapped in relatively inexpensive mortgages. As a result, many people don’t feel that they’re worth selling unless they get a substantial price that justifies giving up on low prices, Fairweather said. As of February, mortgage homeowners had an interest rate of less than 6%. Average rate of a 30-year fixed home loan According to Freddie Mac, it is currently 6.85%.

However, as Americans become accustomed to rising prices and require more movement, the effectiveness of lock-in is beginning to ease, Redfin reported.

Sellers still get Decent value Also about their homes, according to Fairweather, given that the market hasn’t collapsed. She predicts that many sellers who need to move will feel pressured to lower prices to get the sale done.