As the housing boom begins to cool in many areas of the country, homeowners are starting to cut the prices on their houses in hopes of getting that last-gasp “record high” offer that so many of their neighbors enjoyed earlier this year. With prices falling, however, sky-high offers and fierce bidding wars are less likely to manifest for sellers. In certain markets, the nearly half of all listings have at least one price cut on record.
According to Redfin, there are 10 regional markets where 40 percent or more of all listings have had price cuts in 2022 so far.
“The uptick in price drops is symbolic of the slowdown in the housing market,” observed Redfin analysts. Redfin chief economist Daryl Fairweather added, “There are two kinds of sellers in today’s market: Those who already know the market has cooled, and those who are learning about the cooling market as they go through the selling process.”
Fairweather continued, “The former wants to sell quickly before the market slows further, and they’re willing to price slightly below comparable homes in their neighborhood right away, and the latter may have to drop their price if their home doesn’t attract buyers within a few weeks.”
Redfin listed the top 10 markets with the biggest shares of price cuts. They are:
- Provo, Utah
- Tacoma, Washington
- Denver, Colorado
- Salt Lake City, Utah
- Sacramento, California
- Boise, Idaho
- Ogden, Utah
- Portland, Oregon
- Indianapolis, Indiana
- Philadelphia, Pennsylvania
Analysts noted that nearly all of the cities on the list are in the western half of the United States, citing the “outsized impact” from COVID-19 on these states thanks to large volumes of people moving from West Coast markets to inland markets “where outdoor recreation opportunities abound.” Fortune reported, “The regional housing markets seeing the most price cuts are in the very places that soared the most during the pandemic.” This is particularly the case for Utah markets, where there were already housing shortages before March 2020.
By May 2022, however, just over two years after COVID-19 locked down the United States, more people were looking to leave Utah markets than were considering moving there, Redfin reported. This was the case for Boise, Idaho, as well. “The trend has started to reverse … with Salt Lake City seeing a net outflow (more Redfin users looking to leave than move in) for the first time on record in the first quarter,” analysts said.