Sellers Rethink Their Asks as Listings Begin to Linger

Slowly but inexorably, the market has finally begun to shift. Even in this highly competitive environment, sellers who ask for far too much are beginning to face the consequences: homes that stagnate on the market, unsold. Many buyers are simply hitting their financial limits. And that means that, while plenty of homes are still receiving multiple offers, others are undergoing price cuts.

So where are buyers most likely to see price reductions? The data team at Realtor.com® found the markets with the highest percentage of them. This is a sign that these markets, while still hot, are beginning to give buyers a bit more negotiating power.

“In our July data, about 45 cities from the top 300 largest showed an increase in the number of homes with price cuts,” says Realtor.com Senior Economist George Ratiu. “For buyers, these trends hold the promise of a less frenzied market, with more choice and better prices.”

To be clear: Home prices are still up by double digits in most of these cities compared with last year. The national median list price reached $385,000 in July, according to the most recent Realtor.com data. That’s up 10% compared with last year, as there are still more people searching for homes than there are homes to go around. But some market normalization seems to be creeping into the picture.

Price cuts are typical even in the healthiest housing markets, and usually a sign sellers missed the mark. While it varies by place and season, the share of listings with price cuts typically ranges from about 10% to 20%. They are most likely to happen from midsummer to midfall as sellers who haven’t found a buyer get more aggressive with pricing.

“Price cuts could signal a turning point in the market, but they may also just be a sign of sellers getting ahead of buyers in pricing,” says Danielle Hale, chief economist at Realtor.com. “There seem to be some markets where it’s a local custom to price real estate that way.”

Price cuts, after all, can be strategic. Reducing the price of a home can notify buyers who set alerts for when homes in their price range come on the market, or that homes that have been saved in search have seen a price reduction. It can attract more eyeballs to a listing.

To come up with this list, we examined monthly listing data in cities with at least 30,000 households and 100 monthly listings from April to June. Then we averaged the rate of reduced homes—calculated by dividing the number of price-reduced properties by the total number of homes for sale—for that time period. We limited our list to one city per state to ensure geographic diversity.

1. Des Moines, IA

Median list price in July: $193,050  Percentage of home listings with price cuts: 32%

Homes prices in Des Moines have been growing all year, but things are finally starting to shift, says Paul Walter, broker associate at Re/Max Concepts in Des Moines. That’s largely because of buyer frustration.

“I have seen buyers priced out of the market, and others drop out when they see how competitive the market is,” he says. “Losing bidding wars can be very frustrating for buyers, especially those with a home to sell themselves.”

Inventory is starting to creep up, too, as some sellers who delayed listing their homes are trying to get in on the action. With more homes to choose from, buyers can be pickier.

Walter says sellers who expect top-of-the-market prices for their homes, even if they aren’t move-in-ready, are realizing buyers expect a better product if they are paying premium prices. This has forced some to lower their price.

Still, buyers should be prepared to pay up for most homes in Des Moines. The share of homes with price cuts is actually 10 percentage points lower than a year ago.

Walter expects prices to keep rising, but at a slower rate than a few months ago. Eagle-eyed buyers can still find some discounts, including this updated three-bedroom home. It was reduced by $10,000 recently and is available for $215,000.

2. Midland, TX

Median list price in July: $330,050  Percentage of home listings with price cuts: 28%

Midland, in Western Texas, is at the center of the oil industry, so the price of oil and employment rates in the industry largely drive the housing market here. Despite oil prices reaching the highest levels since 2018, companies in the area have curbed drilling activity. That’s part of the reason why the unemployment rate in Midland stood at 6.7% in June, higher than the 5.9% reported nationally.

With fewer locals able to buy homes and fewer people moving to the area, demand just isn’t as frenzied as in the rest of the country.

To help his properties stand out, Chris Beckett, broker and owner at Pine & Beckett Realtors in Midland, says he cuts prices on his listings every seven to 10 days.

That strategy appears to be typical in this market—last year the share of price cuts was slightly higher, at 32%. Buyers in this area could take a look at this three-bedroom home with a recent $5,000 price cut.

3. Toledo, OH

Median list price in July: $117,050  Percentage of home listings with price cuts: 26%

The real estate market in this western Ohio city on Lake Erie has been hot this year, with prices rising an eye-popping 22% in the second quarter of 2021. The share of price cuts is slightly lower than what we saw last year, as more buyers have been entering the market.

Toledo ranked No. 25 on our inaugural Wall Street Journal/Realtor.com Emerging Housing Markets Index in April, which measured housing demand and prices as well as the strength of their economies, the number of good-paying jobs, and the amenities that make a place desirable.

Still, some sellers who may have tried to get in on this growth are having to cut prices. Most of the price cuts are on smaller starter homes, where first-time buyers may have a harder time entering the market. That includes this two-bedroom, which was recently reduced by $3,000, to a more affordable $57,000.

4. Metairie, LA

Median list price in July: $359,050  Percentage of home listings with price cuts: 24%

Just a few miles outside of New Orleans, Metairie homes are priced a bit higher than the rest of the area. But recently things have started to soften, says local real estate agent Devienne Theriot, with Realty ONE Group.

“We’re seeing an increase of price reductions on currently listed properties, as well as an increase in days on market,” she says.

August is typically a slow time, but after months of being priced out of the market and not finding homes that meet their needs, buyers are getting a bit choosier.

Earlier this year, Theriot says, homes were closing at 96% of the sales price. That increased in July but dropped again so far this month.

“We are seeing a shift from buyers settling and sacrificing to get into any home,” Theriot adds. “Their expectations are shifting. Buyers are going back to wanting homes presentable, cleaned, touched up, staged, decluttered, and prepared for the market.”_

5. Philadelphia, PA

Median list price in July: $289,050  Percentage of home listings with price cuts: 22%

The Philadelphia real estate market is still active, but is a little slower than a few months ago, says Tom Skiffington, broker and owner of Re/Max 440 and Re/Max Central in the city.

“There is not as much competition as we have seen over the past six to 12 months,” he explains. “Inventory is starting to increase slightly.”

With more homes coming on the market, sellers who overpriced their homes are needing to reduce prices to drive buyer interest, which remains strong. While bidding wars are still common, these days sellers are seeing two to five offers, instead of the 15 to 25 they received earlier this year.

Most buyers Skiffington deals with are no longer willing to pay significantly over market value.

“We are certainly seeing prices being offered over asking, but not significantly higher,” he says.

Low mortgage rates will keep demand up, but Skiffington says he expects Philadelphia’s real estate market to level off in the fall and winter.

In the meantime, interested buyers can snap up this renovated townhome in Grays Ferry for under $250,000—recently reduced by $36,000.

6. Portland, OR

Median list price in July: $550,050 Percentage of home listings with price cuts: 20%

Prices continue to rise in some of Portland’s most popular neighborhoods, especially in the northern part of the city. Overall though, the market here is stabilizing, says Tim Saeland, an associate with Re/Max Equity Group in the city.

“I have seen more price reductions in the past month to month and a half than we have in a long time,” Saeland says.

This is largely due to sellers realizing they overpriced their homes and their expectations were too high. Already high median list prices are up 7% from April through June of last year versus a year ago, according to Realtor.com listing data.

Some buyers—who felt compelled to offer $25,000 to $100,000 over asking—have been priced out, while others have become frustrated by having their offers continuously rejected.

Still, opportunities exist for buyers, including this four-bedroom home with a mountain view. It was recently reduced by $35,000 and is now available for $490,000.

7. Anchorage, AK

Median list price in July: $315,050  Percentage of home listings with price cuts: 19%

Following the busy spring season, July and August are usually a slow time for real estate in Alaska’s most populous city. Locals here really deserve the chance to enjoy the warm summer weather before the long winter sets in.

While homes here are moving uncharacteristically quickly, the market isn’t as feverish as in other parts of the country. Many properties priced at or just below market rate often see multiple offers, but not many buyers here are desperate enough to waive inspections or other commonly seen last-ditch tactics to make their bids stand out.

Homes are being priced higher in the south and eastern areas of Anchorage, but buyers can still get a deal.

8. Winter Park, FL

Median list price in July: $569,050 Percentage of home listings with price cuts: 19%

Home prices in Winter Park have steadily increased since the nation came out of the Great Recession. But in the past year, prices have spiked as nearly 330,000 new residents moved to Florida, according to the state’s Office of Economic and Demographic Research.

These out-of-control prices are turning off some buyers who may be worried they’re paying too much, especially first-time buyers looking at starter homes. Still, the share of price cuts is little changed from a year ago. Eagle-eyed buyers can find a few newly reduced homes, including this remodeled home located near a golf course that was recently cut by $20,000, to $420,000.

9. Oklahoma City, OK

Median list price in July: $250,050 Percentage of home listings with price cuts: 19%

While prices aren’t going down in Oklahoma’s capital city, the market appears to be shifting, says Becky Ivins, a broker at Movers Real Estate in Oklahoma City.

“The amount of multiple offers has decreased, and the days on the market have increased,” Ivins says.

Most properties sell within the first five days, and sellers see one or two offers these days. While that’s still competitive, it’s not like it was just a month ago when she was seeing seven or eight offers per property. More people are putting their homes on the market, too, so the supply deficit is shrinking.

While the share of price cuts may be similar to last year, with more homes available, buyers in Oklahoma City might find some deals. They’re out there.

10. Peoria, IL

Median list price in July: $89,550 

Percentage of home listings with price cuts: 18%

Located in Central Illinois, about halfway between Chicago and St. Louis, Peoria was recently named one of the 25 best places to live for families by U.S. News & World Report. The real estate market in Peoria continues to be hot, thanks to its relatively affordable prices, low interest rates, and lack of inventory. But like most of the other places on this list, it’s cooling a bit.

While there are fewer price cuts in Peoria compared with last year (when 23% of homes saw reductions), some sellers looking to cash in may have priced their homes too high, says Caitlin Behrends, a broker with Kepple Real Estate Group at Keller Williams Premier Realty in Peoria.

Meanwhile, buyers who have had to deal with a fraught market are getting frustrated. Behrends cited one client in the area who put an offer on seven different houses and lost out every time.

“We’ve actually seen demand slow down a little bit,” Behrends says. “We’ve seen a rise in inventory, and our pending (sales) have slowed down.”

Starter homes under 2,000 square feet appear the most prone to reductions, and price cuts range from $3,000 to $10,000.

If you are a seller, this is best time to sale your house before the prices start to decrease.  Nashville is still hot, but what does the future hold …  If you are a buyer, you might want to wait for some good deals.  There are a lot of foreclosures that maybe coming in the near future.  Many landlords will not be able to hold their properties much longer.  I have been a realtor for over 30 years and I am ready to help you now or in the future.

Erica Sweeney contributed to this report.  Anchorage AKbuying a homedata journalismDes Moines IAhome priceshome sellingMetairie LAMidland TXOklahoma City OKPeoria ILPhiladelphia PAPortland ORprice reductionsToledo OHWinter Park FL Elena Cox is a data journalist for Realtor.com. She has a master’s degree in data journalism from Columbia University’s Graduate School of Journalism. She previously worked for CBS News, Bloomberg TV, and NY1. The realtor.com^® editorial team highlights a curated selection of product recommendations for your consideration; clicking a link to the retailer that sells the product may earn us a commission.