WRE NEWS
Nearly 85,000 home sellers took their properties off the market in September, a 28% year-over-year increase and the highest delisting level for that month in eight years, according to a new report from Redfin.
Nationwide, 5.5% of all home listings were taken off the market in September, up 4.8% from one year ago. This marked the highest September share since at least 2016.
The rise in delistings was attributed to several factors: seven in 10 home listings in September had been on the market for at least 60 days without going under contract and were perceived as “stale”; homebuying demand has slowed due to high mortgage rates, high home prices, and widespread economic uncertainty; roughly 15% of the homes were at risk of selling at a loss, the highest share in five years; some would-be sellers opted to rent their properties rather than sell for less money than they want; and listings rose 8% year-over-year in September to their highest level for that month since 2019, creating an oversupply that outpaced demand.
“That increase is bigger than it looks on paper; it represents a fairly significant jump in delistings from last year,” said Asad Khan, a senior economist at Redfin. “More sellers are giving up because their homes have been sitting on the market for a long time, and they don’t want to or can’t afford to settle on accepting a low price.”
Khan observed the increase in delistings explains why home prices are still rising despite tepid homebuying demand.
“The frequency of delistings is keeping inventory tighter than it looks on paper,” Khan said. “Many homes have a sticker price higher than buyers are willing to pay, but many sellers are unwilling to negotiate. When tens of thousands of homeowners pull their homes off the market rather than accept a low offer, it effectively reduces the supply of homes that are actually available for buyers. That keeps sale prices elevated.”
However, Redfin also noted roughly one in five homes that were delisted over the summer were re-listed within three months: 20% of homes that were pulled off the market in July were subsequently re-listed, as were 18% of homes that were pulled in June.
“Many homeowners who bought during the pandemic demand frenzy still expect sky-high prices. They remember a seller’s market, so they’re hesitant to yield to buyers who want to negotiate the price down and/or ask for concessions,” Khan said. “Recent buyers are also more likely to be testing the market; maybe they would sell and move up to a bigger home in a more desirable neighborhood if they get the price they want, but otherwise they’d stay put. Longtime owners, though, are more motivated to sell—they’re often downsizing or relocating for retirement.”