What Goes Up Must Come Down: The Pandemic Era’s Hottest Markets Are Leading the U.S. in Price Reductions

For those looking to sell their home, many have been forced to face the fact that they won’t get the price they’d dreamed of receiving anytime soon.

To close sales, more sellers are dropping asking prices than at any point in the past few years. The portion of homes on the market with at least one markdown is now outpacing even pre-pandemic years. Buyers simply can’t afford these high price tags now that mortgage interest rates have shot up.

In some parts of the country, as many as half of the homes on the market have had their price cut, making up, at least partly, for the higher monthly payment resulting from the currently hiked interest rates.

So where can buyers find the most discounted homes? And where do sellers need to be more realistic with their asking prices?

The Realtor.com® data team dug into our listings to find out. It turns out, sellers are slashing prices largely in the areas that had been hottest for the past two years. Markets that had become magnets for those fleeing the coastal population hubs, mostly in up-and-coming metros in the West and the South, are now seeing record levels of listing price cuts.

“The unifying thread among these states,” says George Ratiu, senior economist and manager of economic research for Realtor.com, “is they have all seen a significant influx of buyers of the last 2.5 years.”

 

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