Market conditions are changing rapidly. Buyers are pulling back in the face of rising mortgage rates and economic uncertainty. Gone are the days of multiple bidders and offers tens or hundreds of thousands of dollars over list price. While inventory remains relatively low, buyers are discovering they have more leverage than they have had in years. Sellers have to be more strategic to attract interest from a shrinking buyer pool.
In response to the new market environment, many sellers are realizing that they need to adjust their price expectations. But it is a slow process for some sellers, who have watched home prices run up at double-digit rates for the past two years. They may not be happy about it, but more and more sellers are dropping their asking price to find a buyer.
Some Sellers Are Still Overreaching on Price Initially
Overall, about 40% of sellers in the Mid-Atlantic who have an active listing have lowered their list price. But many are taking their time to adjust to new market conditions. Among properties active on the market the first full week of October, only 1% of sellers had dropped their price in the first week. Some sellers are still committed to pricing their home aggressively and are testing the waters. About 8% of homes on the market between 7 and 13 days dropped their list price.
However, the big realization for sellers seems to come once their home has been on the market for 2 weeks or more. Of the properties on the market between 2 and 3 weeks, more than 1 out of 5 (21.5%) had dropped in price. And the share increases steadily—and not surprisingly—as homes stay on the market longer. Among all properties active across the Bright footprint during the first full week of October, 54% of those on the market for 31 days or longer had seen a price drop.