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The Street

Samanda Dorger

Cities Where the Most Home Sellers Are Giving Up

Redfin Calif RI United States

When it comes to homeownership, nothing is easy. Whether you own one or want to buy one or sell one, it’s no cakewalk.

Hopeful home buyers are wrangling with higher interest rates, low inventory, and steep prices. During the pandemic, competition was fierce, with bidding wars and homes selling overnight.

But while buyers still face the challenges of unaffordability, sellers are now facing their own woes. Bidding wars and record-fast sales are gone: A recent analysis by Zillow (ZG) finds that homes are now lingering on the market for a median of 54 days--45% longer than last year.

Even in high-price, high-demand San Francisco, a record share of home listings were taken off the market in November, CBS reports, and sellers are seeing offers drop as interest rates drag down the market.

In fact, Lawrence Yun, chief economist at the National Association of Realtors, predicts that prices in San Francisco are likely to register drops of 10–15% in 2023.

Yun predicts that 4.78 million existing homes will be sold in 2023 in the U.S., a decline of 6.8% compared to 2022 when 5.13 million home were sold.

Sellers are giving up, at least for now. A record 2% of U.S. homes for sale were delisted each week on average during the 12 weeks ending Nov. 20, compared with 1.6% one year earlier, according to an analysis by online real estate brokerage Redfin.

Sellers are taking their homes off the market because they’re not getting the price they want, or not getting offers at all. Redfin says that’s due to a sharp drop in homebuyer demand driven by rising mortgage rates and persistently high home prices.

The early days of summer are considered peak real estate season in most of the U.S., according to Rocket Mortgage, and November is a normal time for the market to slow down when there are fewer buyers. Redfin’s data shows that it’s normal for the number of delistings--listings that go from active to off-market without being sold--to peak before Thanksgiving.

And while the pace of delistings came down a touch between Nov. 20 and Nov. 27, declining to 1.9%, it’s still more than any year since 2015, Redfin’s data shows.

The cities with the most delistings are those that were real estate boomtowns in the pandemic--markets that saw home prices skyrocket as remote workers and people seeking more space fled crowded cities. Now, with many buyers priced out, these markets are among the fastest cooling in the country, Redfin says.

Sacramento, Calif., tops the list, with 3.6% of active listings delisted per week on average during the 12 weeks ending Nov. 27, up 1.6 percentage points from a year earlier--the largest increase among the metros Redfin analyzed.

Based on Redfin’s analysis of MLS data across 43 of the 50 most populous U.S. metropolitan areas (those with sufficient data) these are the homes with the most delistings during the 12 weeks ending Nov. 27, 2022.