Sellers are cutting prices at the highest rate since 2018. But the housing market is still expensive.

Price cuts on the US Housing Market spiked up to 24.3% of all listings in June 2024, the highest level for the month of June that we’ve seen in the last six years. Such a high proportion of price cuts indicates that sellers are feeling a bit more desperation in terms of their home-selling efforts as the calendar turns to summer. A signal that we could see more downward pressure on home prices exerted in the second half of 2024.

Last year, at the same time, only 19.4% of sellers reduced the price on their listing, indicating that last year’s market was tighter and more limited by inventory. Heading further back into the pandemic, we can see that the Price Cut % bottomed at 10.8% in June 2021, which aligns with the peak frenzy in the pandemic housing market. With so much buyer demand so little inventory back then, sellers had little incentive to reduce the price.

But that is no longer the case. Sellers, especially those in states like Texas, Florida, and Arizona, understand that the market has shifted down and are becoming more and more eager to effectuate a sale by reducing the price of their house.

However, unfortunately for buyers, overall price levels are still very high. The Median List Price for houses increased to $445,000 in June 2024 compared to the previous month. This level was up significantly from the winter, and roughly matched the June of the previous two years. Indicating that sellers are still coming to market with heavily unrealistic expectations about what they can sell their house for.

The good news is that we are entering the time of the year when sellers reduce list prices for seasonal reasons. So buyers can expect more relief over the next six months from simply a seasonal standpoint. The real question is if the selling price that is building right now in terms of higher price cuts will spill over into more severe price reductions as the Summer drags on into the Fall.

I think that is an increasingly likely scenario in the Sun Belt, particularly in housing markets like Florida, Texas, Tennessee, and Arizona. The metrics in these markets are deteriorating fairly quickly from a seller’s standpoint, while the inventory and price cuts are spiking.

Make sure to go to www.reventure.app to check out what the data is saying in your city and ZIP code. June 2024 data will be updated shortly.

-Nick