Home Sellers Are Resetting Expectations
It was exactly five months ago when we were saying, “it’s a seller’s market in US real estate right now.” A lot has changed.
Take, for example, George Giacoia, a 70-year-old retiree who put his Southampton home on the market in May for $1.695 million. The Hamptons market soared during the pandemic, reaching record highs, which convinced Giacoia and his real estate agents that the house would find new owners fast.
“I had no response at all,” he said. “There was not a phone call, nor was there a person that came to any of the open houses.”
Since then, Giacoia has had to cut his listing price by $400,000. And he’s not alone. In the Hamptons, the luxury enclave in the eastern end of Long Island, homes with price drops made up 11% of the overall market in July, almost double the level in April. Reductions have varied anywhere from $100,000 to more than $700,000.
Those price cuts would have been unimaginable just a few months ago. But given the recent market environment, it may not be too much of a surprise to hear that sellers are being forced to pump the brakes on their optimism. Demand from buyers has subsided as they face several headwinds, including inflation making everything more expensive, mortgage rates above 5% and a bumpy stock market.
It isn’t just affecting the Hamptons. Sales of new US homes fell in July for the sixth time this year to the slowest pace since 2016. Toll Brothers, the largest luxury homebuilder in the US, has increased buyer incentives to navigate the slowdown in demand. And sellers in pandemic boomtowns are slashing prices to adapt their expectations to the newly cooling market.
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2yHome sellers are slashing prices because you can’t afford to buy.
Realtor Associate @ Next Trend Realty LLC | HAR REALTOR, IRS Tax Preparer
2yAgain Do To Covid The Housing Market is unpredictable along with Supply and Demand.
LinkedIn Creator focused on long term care facility development, management structure, activities, pricing, ownership
2yMore good advice. Unfortunately there were no good articles on the “costs of buying, and the cost of reselling”. The difference is all that counts.
🌞HippieTRADER.💯UnternehmensBERATER. 🚀Investor.🌐Business-Angel.
2yInsane superhigh prices are coming down to standard levels. Maybe US-houseprices will drop further 30-40% if the FED will rise the interests aggressively like Alan Greenspan did from 2004-2006. Exciting time. Peace+Namaste from Cyprus where the house prices are stable- yet. 🌅
Vice President at IBCC Industries, Inc. Your Single Source for Global Manufacturing Solutions
2yWe sold in March in the midst of the frenzy. We had the typical multiple offers, rapid-fire showings, sell over asking frenzy. We bought a home in a hurry before back in December. We traded dollars at the high, and soon we will be back to tradiNg dollars lower. Waiting to buy if you have something to sell will impoverish the realtor, but you’ll be fine. The beauty of the peak was waiving the inspection clause. It’s that “second round of negotiation” that always drove me crazy. I’m glad we missed that.