(NewsNation) — Homebuyers are gaining leverage in the market, but a new report shows sellers have been slow to adjust.
A Redfin analysis found that list prices are rising more than twice as fast as sale prices, signaling a growing disconnect between buyers and sellers.
In March, the typical newly listed home was priced at a record $469,729, but the typical home sold for significantly less — $431,057. The $38,672 difference, a 9% gap, is the largest margin between list and sales prices since May 2020.
Buyers have outnumbered sellers in recent years, driving up home prices, but the tides have started to turn, and supply now exceeds demand in some areas.
“When buyers and sellers are on different planets, one side eventually has to give in, and it’s looking like it’s going to be sellers this time,” Redfin Senior Economist Elijah de la Campa said in a statement.
The last time list prices outpaced sales prices by this much was during the pandemic homebuying frenzy, when bidding wars were common. Today’s market dynamics are very different — inventory is up, mortgage rates are elevated, and prices remain high — but many sellers are still pricing based on past comps.
“A lot of sellers are bringing up comps from a year ago, and I have to tell them that’s no longer the environment we’re in,” Chaley McVay, a Redfin Premier real estate agent in Portland, Oregon, said in the report.
McVay added: “A lot of house hunters are hesitant to offer under the asking price, but in this market, it’s not out of the ordinary to see sellers lower their prices and give concessions.”
A Redfin report earlier this month found that seller concessions are on the rise, with 44% offering perks like credit for repairs, help with closing costs or mortgage-rate buydowns.
In some markets — particularly in the Pacific Northwest — the share of sellers offering concessions was much higher: 71% in Seattle and 64% in Portland.
Redfin said another reason for the current misalignment is that many of today’s sellers bought at the market’s peak in 2021 and 2022 and are now trying to recoup their investment.
Where are home buyers and sellers most out of sync?
Redfin found that buyers and sellers have grown the furthest apart in West Palm Beach, Florida, where the median list price rose 9.3% year over year in March, while the median sale price dropped 0.3%.
A wide gap has also opened up in Pittsburgh, with list prices rising 7.9 percentage points faster than sales prices. Cincinnati (7-point gap), Atlanta (6.3-point gap) and Jacksonville (6.1-point gap) rounded out the top five.
Of the 50 most populous metros, only eight have seen sales prices grow faster than list prices over the past year, according to Redfin.
Cleveland tops the list, where the median sale price was up 11.8% year over year in March — 7.5 percentage points faster than the median list price. Nassau County, New York, Milwaukee, Philadelphia and Newark, New Jersey, also saw sales prices outpace list prices.
