You know what? Forget it.
That’s what scores of American home sellers said in September, when delistings hit the highest for that month in eight years, according to figures released this week.
As discussed here on any number of occasions, home sellers are (very) reluctant to concede that market dynamics have shifted decisively in favor of buyers.
That’s understandable. The reluctance, I mean. The post-COVID boom was characterized by bidding wars which in some locales bordered on the absurdist, as sellers routinely paid over asking price for desirable properties in pandemic boom towns.
It’s tough to admit you missed the boat, but that ship has well and truly sailed. Indeed, as the figure below reminds you, sellers now outnumber buyers by almost 40%.
Simply put: If you want to sell your home, you’re going to have to make concessions, starting with price. That’s particularly true given the persistence of six-handle financing costs, a heavy lift for young Americans, most of whom simply aren’t old enough to remember a time when mortgage rates were north of 6%.
For many sellers — and particularly for those who’ve owned their home only since the pandemic — the prospect of accepting a lower price is simply too unpalatable to countenance.
As the figure below shows, some 85,000 homes were pulled off the market in September, according to data released this week by Redfin. That’s up 28% YoY and the most for any September in nearly a decade.
The chart also shows delistings as a share of total listings. At 5.5%, that figure was the highest for any September analyzed by Redfin.
In the same update, Dana Anderson noted that seven in 10 US home listings were considered “stale” in September, where that means the properties had been on the market for at least 60 days.
Anderson and her colleagues also calculated the share of delisted homes where the seller was at risk of taking a loss. That figure for September: 15%.
As a senior economist at Redfin put it, “More sellers are giving up because… they don’t want to or can’t afford to, settle on a low price.”
Call this yet another manifestation of a US housing market condemned indefinitely to a kind of frozen limbo.
As a seller, my math is as follows: The cost of materials and labor have continued to rise, if this house costs $800 to build, why should I sell it for $600?
If the cost of home production falls, then my math is wrong
If you bought a stock for $100, why would you sell it for $80? Same reasoning. I both cases you would do this if the lower price was what the asset was worth and you had a better use for the money. I have owned five houses over the years. Three were bought when rates were more than 9%. One was bought for cash. With the total costs properly calculated I made no money on any of my houses. They were lousy investments, as most houses actually are. My other assets have done much better.
Me too. The only one that I made money on is an unrealized gain. 🙂
I flip/build/rent houses on the side, and I’m living in my 8th house in the past 25 years. Right now the math isn’t working for me and I’m not building anything (which isn’t great for my mental health). I have 3 lots and an unsold house I’m just sitting on for the time being. I live in a desirable market and people aren’t even looking.
In your analogy, the house is a commodity and the price is set by the market. True, for the most part. In my version, I didn’t get enough interest and pulled the IPO
As a recent buyer , I was aware of the mortgage rates going in , what amazed me was all the tack on costs as part of the transaction , felt like every little charge for documents or certificates was way over the top. The final list ran to 2 pages
I am one of those sellers.
Originally put ours on the market for $650,000,
Knocked the asking price down 2 months later to $630,000 because there weren’t even any lookers.
3 months later, lowered the price to $615,000 and finally SOLD it two months later for $605,000.
On the market for 7 months… but its gone.