Home sellers in pandemic homebuying boomtowns like Boise, Salt Lake City and Sacramento increasingly dropped prices as buyers backed out of the market.
A high share of home sellers dropped their asking price in July, particularly in pandemic boomtowns, as they struggled to match their expectations with the reality of the cooling housing market.
Nearly 70% of homes for sale in Boise, ID, had a price drop in July, the highest share of the 97 metros in this analysis. Next come Denver, where 58% of homes for sale had a price drop, Salt Lake City (56.4%) and Tacoma, WA (54.8%). Those four metros also topped the list in June, and Boise, Salt Lake City and Tacoma were also among the 10 metros with the biggest upticks in their price-drop rates from a year earlier.
Tampa, FL (52.1%), Sacramento, CA (52%), Indianapolis (51.4%), Phoenix (50.1%), San Diego (49.7%) and Portland, OR (48.3%) round out the top 10. More than half of those metros–Boise, Denver, Tacoma, Sacramento, Phoenix, San Diego and Portland–are among the 20 housing markets that cooled fastest in the first half of 2022 after attracting scores of eager homebuyers during the pandemic.
“Individual home sellers and builders were both quick to drop their prices early this summer, mostly because they had unrealistic expectations of both price and timelines. They priced too high because their neighbor’s home sold for an exorbitant price a few months ago, and expected to receive multiple offers the first weekend because they heard stories about that happening,” said Boise Redfin agent Shauna Pendleton. “My advice to sellers is to price their home correctly from the start, accept that the market has slowed and understand that it may take longer than 30 days to sell. If someone is selling a nice home in a desirable neighborhood, they shouldn’t need to drop their price.”
Nationwide, the share of homes for sale with price drops reached a record high in July. Sellers had to cut their prices because they were catching up with buyers, who had come to expect lower prices amid a cooling market. Rising mortgage rates and the prospect of falling home values also made buyers hesitant to pay sky-high prices, and an uptick in supply gave them more to choose from. Price drops are likely to flatten out as sellers come to terms with the shifting market.
More than 15% of home sellers dropped their asking price in every major U.S. metro
Nashville, where 32.3% of homes for sale had price drops, represents the typical metro area in July: Half the metros in this analysis had a higher share of price drops, and half had a lower share of price drops.
More than 15% of home sellers dropped their price in July in each of the 97 metros in this analysis. In McAllen, TX, 15.7% of sellers dropped their asking price, a smaller share than any other metro. It’s followed by Newark, NJ (15.8%), Miami (18.5%), Honolulu (18.5%) and Bridgeport, CT (18.8%).
The share of homes with a price drop increased from a year earlier in all but three metros, all of which are in Illinois. The share dipped from 28.2% to 22.3% in Lake County, 27.3% to 22% in Elgin and 26.4% to 21.3% in Chicago.
Share of homes for sale with a price drop in July 2022
97 most populous U.S. metros
Sorted by share of for-sale homes with a price drop in July 2022
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