It’s the same housing story across the U.S., say real estate agents in three American cities. Sellers offer more concessions as buyer demand declines and listings remain on the market.
“Gone are the days of ‘hey, my neighbor just sold last year for $100,000 over asking price.’ Sellers absolutely have to negotiate,” Dan O’Brien, an agent with Trueblood Real Estate who covers Indianapolis, told Yahoo Finance (video above) .
And that’s good news for customers.
“Now, we actually have buyers that are protected from contingencies like inspection and appraisal,” O’Brien said, “where many times that was out the window during the height of the craziness of the COVID market.”
Here’s what’s happening in Denver, Indianapolis and Charlotte, North Carolina, according to these agents.
Denver housing slowed in December. The average selling price fell 4% compared to the previous year to . Amid the cooling, buyers are taking their time shopping for homes and looking for incentives. The sharp turnaround comes after the Denver market is up 30% since March 2020.
“At this point, sellers are working to help raise the interest rate.” So they’re offering a 2-1 buyout,” said Kathy Casey, a real estate agent at Coldwell Banker in Denver. “This means that for the first two years your interest rate would be lower than the market rate.”
However, the market is showing a potential shift.
“So we’re already starting to see signs of a spring market, which shows that it may be a heated market,” Casey said. “So get out, find a house you like and love.”
Similarly, housing activity in Indianapolis declined through the end of 2022. Homes remained on the market compared to an average of just four days in May 2022.
“Customer demand has certainly slowed with those rising interest rates,” O’Brien said. “Things take a little longer in the market.
The increase in days on the market is partly due to an increase in the supply in the house. In December, there were almost 1,600 active ads in the city, which is an increase of 26% compared to the same period last year.
“To put it in perspective, we just smashed the number to where it was before COVID,” O’Brien said. But “we’re still a little out of stock.”
Buyers are still struggling with affordability issues, as mortgage rates are still significantly higher than a year ago. Banks and retailers come to the rescue.
“Different banks offer different types of mortgage products to help increase your mortgage rate.” O’Brien said, “And sellers are offering a 2-1 buyback loan, or just generally, to buy off the interest rate to make it more affordable for the buyer.”
As in other markets, sellers in Charlotte are providing incentives to close deals, particularly by paying closing costs and lowering interest rates, says Sir Ashley Harrison, a real estate broker with the Harrison Group with Fath Realty in Charlotte. Prices, however, do not move that much.
“We’re seeing more inventory but less new listings,” Harrison said. “And we’re getting a lot more concessions to sellers, but prices have remained very sticky.”
The number of homes sold in Charlotte has declined over the past six months. They were on the market only in December, which is a drop of 42% compared to a year ago. And homes stayed on the market for an average of 48 days in December, more than double the number of days in May 2022.
“Customer demand is down,” Harrison said.
Rebecca is a reporter for Yahoo Finance.
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