‘Sellers are starting to freak out’: Redfin CEO sees market slowdown

It’s?Monday May 31, and we’re rolling into the first week of June with a new report showing?listing prices finally starting to fall?— and the company behind the report,?Redfin, amplifying it with?Glenn Kelman?telling CNBC that “prices are going to soften.” Read all about it, straight ahead this morning.

‘Sellers are starting to freak out’: Redfin CEO sees market slowdown

THE NEWS:?Redfin CEO?Glenn Kelman?has read the tea leaves, and according to him, the tides may finally be turning in homebuyers’ favor after?two years of record-shattering home price growth. “[The market will be] probably the same,” he said on CNBC’s Closing Bell. “Rates are probably six percent, inventories are increasing, sales volume will be somewhat fine, but?prices are going to soften.”

Kelman didn’t specify how much prices would soften; however, he noted the decline would be enough to place homesellers — especially those looking to make a major upgrade — in a pinch as rising mortgage rates and lower sales profits would make affording a new home difficult. “If you combine interest rates [and] what’s happened to home prices over the past year, the mortgage payment for median price home in the United States is up 43 percent,” he added. “So buyers are saying I’ve had enough and sellers are starting to freak out a little bit.”

BEHIND THE NEWS:?Kelman said?homesellers in secondary markets?are likely ‘freaking out’ the most, since early-pandemic migration trends led to a boom in demand and the opportunity to make a hefty profit. Instead of engaging in bidding wars, Kelman said homebuyers are simply setting their sights on other markets that have more affordable housing.?Read the full story here.

>>> NUMBER OF THE DAY:?13,400?transaction sides closed in 2021 by the?most productive single office in the country <<<

List prices are finally starting to fall

THE NEWS:?The intense market competition of the last two pandemic-fueled years is finally beginning to slow down, according to a new report from Redfin.?Nineteen percent?of homesellers — or nearly one in five —?dropped their listing price?during the four-week period ending on May 22, 2022, marking the largest number of sellers to do so since pre-pandemic times in October 2019. During the four-week period ending May 1, just 15 percent of sellers?dropped their asking price.

BEHIND THE NEWS:?In addition, the typical listing’s time on market, the share of homes that have gone pending within one week, and the share of homes sold above-asking have all plateaued, another sign of the market cooling off.?Mortgage purchase applications?were also at the same rate as they were in June 2020 (down 16 percent year over year) and the number of buyers visiting and making offers on homes, according to the Redfin Homebuyer Demand Index, saw its largest annual decrease since April 2020, a decline of 12 percent year over year. Read the full story here.