- Home prices are seeing the biggest discount in two years, and homes are sitting on the market longer. That signals the housing market is tilting in favor of buyers as the critical spring selling season is about to begin.
Housing prices may have been listed too aggressively, as sellers settle for offers below what they initially sought.
According to a Redfin report, the average home listing sold for 1.8% less than its asking price in January, the largest discount in nearly two years.
In addition, it takes the average home 56 days to go under contract, the longest in nearly five years. With a slow market, buyers have more time to negotiate on pricing and terms for certain homes.
“The listings lingering on the market tend to be in unpopular neighborhoods, or require renovation,” Charles Wheeler, a Redfin agent in San Diego, said in the report. “Relatively affordable, move-in ready homes close to highly rated schools are selling quickly, often with multiple offers.”
The Redfin data is the latest sign that the housing market is tilting in favor of buyers as the critical spring selling season is about to begin.
In December, home delistings spiked 64% from a year ago to 73,000, their highest levels since 2015, according to CoreLogic data cited by the Wall Street Journal. That’s as buyers increasingly turned down sellers, who had added more supply to the market.
To be sure, homes are not suddenly cheap. Prices were up 4% in January compared to last year. Additionally, the average 30-year mortgage rate remains elevated at nearly 7%.
Higher housing prices and rates have shoved the average homebuyer’s monthly payment to nearly record highs, according to Redfin.
Still, there are deals to be had, and Redfin pointed to one state in particular that stands out: Florida.
In West Palm Beach, Fort Lauderdale, and Miami, the typical home sells for 5% below asking price, the biggest markdown among the 50 most populous U.S. Metro areas. Tampa and Jacksonville saw home sales at roughly 4% less than the asking price.
According to a separate Rocket report, Miami-Dade January housing sales saw 78% of homes close under the asking price.
All of these metros are selling at a larger discount than they were in January 2024, according to Redfin. The Florida market has been battered with natural disaster concerns, causing potential buyers to reconsider. Extreme weather events have caused home insurance costs to soar, along with HOA fees and property taxes. Sellers are more enticed to accept an offer under the listing price as demand slows.
Homes are selling above asking in only seven of the U.S. 50 most populated metros, led by San Jose, where homes are selling on average 3% above asking price, Redfin said.