Home prices coming down (reprise)?

Daily Data: Could it be a buyers' market out there soon?

In today’s dispatch: so you’re saying there’s a chance?!

• one dramatic indication that sellers are getting with the program

• price cuts are in the air

• supply is building

• builder inventory is reaching levels that have to be seen to be believed (and some people are concerned, but not RW)

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Home prices coming down (reprise)?

Spring is usually the season for buying houses, but it’s probably not going to happen this year.

Interest rates have killed purchasing power, and homeowners don’t want to sell at the lower prices people can actually pay, and so the market stays stuck. Bid-Ask is just too wide.

Of course, homeowners could do what homebuilders do, and y’know, cut prices, but they’re not in any rush—because their lenders are locked-in by low rates—so would-be sellers just wait.

The good news (for homebuyers) is that homeowners have been waiting for over a year now, and so maybe they’re getting impatient?

Here’s one indication that is indeed what’s happening.

This could be a data issue, but “de-listings” spiked—I mean, really spiked—April to May:

Mike DelPrete

Delistings were already running a little higher than usual, but they jumped from 5% all the way to 9%, just as the peak season kicked off.

So delistings almost doubled in a two-month period when all the buying and selling is supposed to happen.

Why would a homeowner delist their home?

• Well, one possibility is that the owner priced it too low, and now wants to jack up the price.

• The other possibility is that they priced it too high, got no nibbles, and rather than do a “price cut” (which “looks bad”) the owner will just re-list again at a lower price.

Random Walk is pretty confident that the answer is behind door #2: the prices are too damn high, and price cuts are on the way.

How do I know?

Well, the signs are pointing to “buyer’s delight” that’s how.¹

A homebuyer’s market?