With high mortgage interest rates, inflation and the looming threat of a recession, the U.S. housing market has cooled quickly.
More sellers are rethinking the current environment and taking their homes off the market.
In a span of 12 weeks ending Nov. 20, Redfin reported a record 2% of homes for sale were delisted each week. That would mean about 8% of homes come off the market monthly now. In the D.C. metro area, Redfin data shows one in 10 homes for sale are eventually delisted.
If a home hasn’t found a buyer in about a month, it is considered stale.
“When you’re on the market for 30 days, you are typically not going to find an offer at the price you are sitting at. So, without a substantial price drop, you’re pretty much likely to be delisted,” said Taylor Marr, deputy chief economist at Redfin.
A buyer who delists may do so with intention of putting the home back on the market and try again. It may look like a new listing when it comes back, but real estate agents and buyers can easily see if it has previously been listed recently. That might create an image problem for the property.
“That raises some red flags for buyers, because if no one wanted the home before, why should they be the one to buy it. But depending on the price, if the price has come down substantially, then buyers might feel like it is a really good deal,” Marr said.
Even in a normal market, sellers in the slow fall season may take the home off the market and re-list it again in the busy spring market a few months later. If the Federal Reserve continues raising rates, and inflation does not moderate, that might not be a workable strategy.
“The big problem is that we might not have enough demand out there to support sellers coming back. So they might decide to, rather than waiting for spring, wait for another year or two,” Marr said.
