The red-hot real estate market is slowly cooling as sellers in big markets lower their prices, according to brokerage firms.
Notable in the market are urban areas in California and Utah, where prices were often set unrealistically high, Redfin reports. The highest number of price drops on homes occurred in July in Boise, Idaho, where sellers lowered prices on 70 percent of homes for sale. In Salt Lake City, 56 percent of sellers lowered their prices in July. In fact, more than 15 percent of home sellers dropped their prices in July throughout all metro areas.
This trend may well affect areas throughout the country.
Rising interest rates have cooled expectations across the board. Rates that remained under 4 percent since 2019 are rising to about 5 to 6 percent. As buyers become a little less available, this should mean that the supply of houses on the market will rise.
Sellers should expect to see their homes on the market for 30 days or more and they should price their homes in line with the market from the start. Some sellers showed unrealistic expectations about what prices their homes would fetch, Redfin says. Part of that problem was the seller grapevine, with people listening to the prices neighbors were getting on their homes and trying to win big themselves.
For now, even with higher interest rates, buyers should begin to have more choices and better prices and sellers will have to be open to not only pricing realistically but also willing to negotiate.