The Great Home Seller Rethink: Why Listings Are Vanishing and What It Means for You
The housing market is sending mixed signals, but one trend is crystal clear: sellers are hitting the pause button. A growing number are pulling their homes off the market, not because they’ve found a buyer, but because they’re unwilling to accept current offers. This isn’t a temporary blip; it’s a significant shift with implications for both buyers and sellers heading into the traditionally slower winter months.
The Delisting Surge: Numbers Tell the Story
Recent data from Redfin reveals a striking increase in delistings. Nearly 85,000 U.S. homes were removed from the market in September – a 28% jump year-over-year and the highest figure for that month in eight years. This isn’t just about seasonal adjustments; it’s a direct response to market conditions. Consider the case of Sarah Miller in Denver, Colorado, who delisted her three-bedroom home after two months with no acceptable offers. “We originally priced it based on what our neighbors sold for six months ago,” she explains. “But the market has changed, and we’re not willing to give it away.”
Compounding the issue, 70% of listings were on the market for 60 days or longer in September, according to Redfin. This prolonged exposure signals weakening demand and puts further pressure on sellers.
Price Weakness: The Core of the Problem
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index shows a slowing of price growth, with a 1.3% year-over-year increase in September, down from 1.4% in August. While prices are still higher than last year, the deceleration is noticeable. More telling is the trend in price reductions. Zillow reports that the typical listing now sees $25,000 in cumulative price cuts – the largest discounts ever recorded. This indicates sellers are actively trying to attract buyers, but often unsuccessfully.
Pro Tip: If you’re a seller, be realistic about pricing. Look at *recent* comparable sales in your area, not those from earlier in the year. A slight overpricing can lead to a prolonged listing and ultimately, a lower sale price.
Inventory Illusion: Delistings Tighten Supply
Despite a 15% increase in overall inventory compared to last year (according to Realtor.com), the surge in delistings is creating an “inventory illusion.” Asad Khan, a senior economist at Redfin, explains, “When tens of thousands of homeowners pull their homes off the market, it effectively reduces the supply of homes actually available.” This artificial scarcity can help maintain prices, but it also frustrates potential buyers.
This dynamic is particularly pronounced in markets that saw the most significant price appreciation during the pandemic. Cities like Boise, Idaho, and Austin, Texas, are now experiencing some of the highest delisting rates.
Looking Ahead: What to Expect in the Coming Months
The housing market is entering its seasonal slowdown. While roughly 20% of delisted homes are eventually relisted, many sellers will likely wait until the spring buying season to try again. This could further constrain inventory in the short term.
However, the longer-term outlook is more complex. While home prices remain 50% higher than five years ago, approximately 15% of homes delisted in September were at risk of selling at a loss – the highest share in five years. This suggests a growing number of sellers are facing financial pressure and may be forced to lower prices or accept losses to sell.
Did you know? Mortgage rates have a significant impact on delisting rates. A sudden spike in rates can discourage buyers and lead more sellers to withdraw their listings.
The Impact of Pending Sales & Mortgage Rates
October saw a slight uptick in pending sales – up 1.9% month-over-month – but they remained essentially flat year-over-year. This modest increase was likely fueled by a temporary dip in mortgage rates, which subsequently rose again in November. This volatility underscores the sensitivity of the market to interest rate fluctuations.
Experts predict that mortgage rates will remain elevated for the foreseeable future, continuing to put downward pressure on demand and potentially leading to further delistings.
FAQ: Navigating the Current Housing Market
- Q: Why are so many homes being delisted?
A: Sellers are pulling listings because they’re unwilling to accept lower offers in a slowing market. - Q: Will home prices continue to fall?
A: While a significant crash is unlikely, further price moderation is expected, particularly in overvalued markets. - Q: Is now a good time to buy or sell?
A: It depends on your individual circumstances. Buyers have more negotiating power, while sellers need to be realistic about pricing. - Q: What should I do if I’m a seller?
A: Price competitively, consider making concessions, and be prepared to negotiate.
The current housing market is a challenging one for both buyers and sellers. Understanding the dynamics at play – the surge in delistings, the weakening prices, and the impact of mortgage rates – is crucial for making informed decisions. Staying informed and working with a knowledgeable real estate professional will be key to navigating this evolving landscape.
Want to stay ahead of the curve? Subscribe to CNBC’s Property Play newsletter for weekly insights into the real estate market.
