Sellers are flooding the home market while buyers sit on their hands in these US cities — creating a historic imbalance
According to real estate brokerage Redfin, April saw nearly half a million more homes listed than buyers in the market, the largest gap since at least 2013.
But this supply surge hasn't translated into a wave of closings. Instead, home sales have stalled in many areas, particularly across the Southeast and Southwest, where inventory has ballooned past pre-pandemic norms.
In Miami, for example, there were almost three times as many sellers as buyers in April, Redfin data show.
Jeff Lichtenstein, president of Echo Fine Properties in Palm Beach Gardens, Florida, told the Wall Street Journal sellers are increasingly slashing asking prices to entice cautious buyers.
'There will be more price reductions that are going on, and more willingness to sell at a lower number, especially in the next couple months,' he said. 'We've definitely seen people who have taken losses.'
These conditions mark a sharp reversal for the Sunbelt, which saw home values soar and bidding wars erupt during the COVID years.
Now, many of those same metros — Atlanta, Austin, Phoenix and Tampa among them — are seeing listings linger, as affordability challenges, higher mortgage rates and buyer wariness take hold.
Nationally, home prices are still rising, but that growth is cooling.
US prices climbed 1.4% in May from a year earlier, according to Intercontinental Exchange, down from 2% annual growth in April. Twenty-four of the 100 largest metro areas posted year-over-year price declines in May, with the bulk of those concentrated in the Sunbelt.
'There's not even usually a home for sale in our neighborhood, and I think there's three or four right now,' Dirk Lovelace, who listed his Tryon, NC, house in April, told the Journal.
After relocating to South Carolina, he cut the asking price but still hasn't received an offer. 'The current sentiment is, the market's probably going to go down further, so people are just waiting,' he said.
Buyers appear to be in no rush.
Home prices have surged more than 50% nationwide over the past five years, and mortgage rates remain elevated above 6.5%. Though active listings in May reached their highest point since 2019, they are still about 14% below typical pre-pandemic levels, according to Realtor.com.
Still, the gap between buyers and sellers is widening, in part because many homeowners are listing out of necessity rather than opportunity.
Some are relocating for jobs, while others are exiting investment properties as costs rise or in anticipation of a price dip.
'It doesn't feel like buyer demand is going to come back that much,' Chen Zhao, Redfin's head of economic research added. 'Prices are just too high.'
In markets like Denver, longtime agent Elle Pappas told The Journal the tone of conversations with buyers has shifted dramatically from the frenetic pace of recent years.
'The immediate conversation, even upon the first appointment I have with them, is, 'How much of a discount do you think I can get? How many concessions can I get?''
Carley and Garrett Kapelski, who had previously paused their home search due to competition in the Kansas City suburbs, said they've noticed a shift this spring.
'We feel a lot less stressed this time,' Garrett Kapelski said. 'If we wait another 30, 60 days, maybe you'll see these people that thought they would be able to sell their houses quickly, and maybe already bought another home, start being willing to wiggle a little bit.'
Much of the current slowdown can be traced to the uneven recovery in housing supply following the 2006 to 2009 crash, coupled with the lock-in effect of low pandemic-era mortgage rates.
But that trend may be easing.
New-home construction has picked up since the pandemic, and more homeowners are beginning to list — some simply because they can't wait any longer, whether that is due to job transfers, having children or otherwise, Pappas explained.
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