After more than a decade of what sometimes felt like growth with no end in sight, real estate markets across the country are seeing a stunning reversal.
Between high mortgage rates pricing people out and a slowing sales cycle, many homeowners find themselves lowering the price that they had initially hoped to sell for in order to find a buyer. The median home price dropped 0.9% in the first year-over-year decline since 2017, according to Realtor.com.
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While years of underbuilding and low housing inventory means demand is not likely to go anywhere in the long-term, homeowner confidence about being able to sell high is slowly to break.
The One Thing People Want To Know About Selling A Home
Amy Nixon, a real estate agent and housing agent in the Dallas-Fort Worth area, posted a summary of the most common searches from US homeowners on Alphabet's (GOOGL) Google over the last month.
While the top question was a technical search for mortgage company PennyMac (PFSI), searches like "sell my house fast phoenix" and "sell my house fast arlington" are trending in many markets.
"Can I sell my house if it is in foreclosure?" is another breakout question currently breaking out on Google.
Numbers from real estate data company Attom show that, after hitting record lows in 2021, foreclosures started to rise as the economy turned. In April 2023, the numbers of homes seized by the lender rose by 14% from a year ago.
"U.S. Homeowners are in great financial shape," Nixon wrote in her post sarcastically to refer to those who believe that the housing market will bounce back fast. "This isn't 2008."
There has also been a 500% spike in people searching how to secure a home equity loan as well as questions about how to borrow against one's home with bad credit or in specific states and cities. In Texas, searches for "best home equity loans" are up by 300%.
Here's What is Actually Going On With Home Prices Across The Country
As pointed out in the comments to Nixon's post, the numbers vary greatly from market to market and may reflect fears rather than the actual state of the economy.
The South, in particular, is still seeing home prices rise in rates similar to a year ago while cities such as San Francisco and Las Vegas saw high drops that many experts see as stabilization after a few years ago anything-goes growth that does not reflect actual demand in the city.
Various real estate experts and associations predict different scenarios. Fannie Mae and the National Association of Realtors expect the median home price to fall between 1.2% and 1.8% in 2023 while property intelligence firm CoreLogic (CLGX) expects an increase.
All however, expect any drops to be short-lived amid a growing population and lack of enough housing supply. Affordability is also not expected to improve since any drops are small and offset by mortgage rates that are pricing out large numbers of would-be buyers.
"The housing market will be tepid in 2023, with only lukewarm demand and a limited amount of inventory available for sale [...but] mortgage rates could pull back meaningfully if inflation pressures ease," Bankrate Chief Financial Officer Greg McBride said in a recent statement.
