After a stellar two-year run, the housing market is sputtering as buyers pull back sharply. One real-estate chief said the market is indeed course-correcting, and it’s getting hard to make a deal as more contracts falling through. After the Federal Reserve hiked interest rates, “demand fell sharply in May and June … buyers were absolutely freaked out,” Redfin
CEO Glenn Kelman told MarketWatch in an interview.
Since then, the housing market has since recovered somewhat, he noted, but “we still will have, even for the deals that are under contract, a very high cancellation rate.” “It’s just hard to put deals together because the economy is so volatile,” he added. “It’s a remarkably uncertain time.”
“‘It’s just hard to put deals together because the economy is so volatile.’”
— Redfin Chief Executive Glenn Kelman
Responding to buyers pulling back from the market, sellers have also become increasingly apprehensive about listing. New listings for homes have fallen 15% in the four weeks ending Aug. 21, a report published Thursday by Redfin said. That is the biggest decline in listings since the start of the pandemic. That’s pushing down the supply of homes slightly, Redfin said, as the number of for-sale homes dropped 0.6% from the previous four week period. To find a match quickly, sellers are pricing their homes more aggressively, with the median asking price of newly listed homes falling 5% from the record high set in May. But not all sellers are able to find eager buyers. In some hot pandemic markets like Boise, Idaho, 70% of the homes for sale had their prices slashed in July, Redfin said. Builders are also trying harder to entice buyers, Kelman added, and “just as aggressive” with price cuts as existing-home sellers.
“‘Some of the price corrections that are in the public record understate just how drastic the correction has been.’”
— Toll Brothers Chairman and CEO Douglas C. Yearley
On its third quarter earnings call on Wednesday, Toll Brothers
Chairman and CEO Douglas C. Yearley said that the company has “started to modestly increase incentives” in recent weeks, with the average incentive in Augus …