The housing market slowdown is, well, slowing down. As buyer demand cools, fewer sellers are listing their properties, contributing to a slower rate of price drops, according to a new Redfin report, released Thursday.
In the four-week period ending Aug. 14, the number of new listings was down 14% from a year ago, the largest decline since June 2020. As a result, the overall number of active listings during the period fell 0.2% from the prior four-week period. This is the first decline in the number of active listings since the four weeks ending on Jan. 30, 2022. Year over year, active listings were up 4%, the smallest increase since the four weeks ending July 3, 2022.
With fewer homes on the market, sellers are facing less competition in attracting the now more limited pool of buyers. This, coupled with sellers adjusting to the cooler market conditions, has resulted in the share of homes for sale with price drops remaining at 7.7%, after hitting that record high in the prior four-week period.
“Many homeowners have been reluctant to put their houses up for sale during a market slowdown, which is now holding back inventory growth,” Taylor Marr, Redfin’s deputy chief economist, said. “That means buyers have fewer homes to choose from and may lose some of their newfound bargaining power, which allows sellers to maintain their list prices instead of having to cut them.”
Although the share of home with price cuts is holding steady, home-price growth has slowed, with the median home sales price rising just 7.7% year over year to $373,750. This is down 5.5% compared to the record high of $395,373 set during the four-week period ending June 19. Two California metro areas, Oakland and San Francisco, saw their median sales price drop on an annual basis, falling 1.5% to $926,000 in Oakland, and 2.8% to $1.463 million in San Francisco.
Median asking price growth has also slowed, posting an 11% yearly increase during the four-week period, to $385,725, down 4.7% from an all-time high set during the four-week period ending May 22.
In addition, just 41% of homes sold above list price, compared to 51% a year ago, as the sale-to-list price ratio fell to 100.3% from 101.6% a year prior.
While buyer demand is waning, homes are still selling at a fast pace, albeit slower than a year ago. During the four-week period, 37% of homes that went under contract had an accepted offer within their first two weeks on the market, down from 44% a year prior, while 25% had an accepted offer within one week, down from 31% a year ago.