Introduction to Home Sales
Sticker shock and cold feet are leaving nervous American homebuyers adrift.
Indeed, real estate deals across the country are going up in flames.
Cancellation of Home-Purchase Agreements
About 15% of home-purchase agreements were cancelled in September, the Wall Street Journal reported, citing Redfin data. That rate is up from roughly 13.6% last September. Economic and employment fears, paired with elevated costs of homeownership, all add fuel to the fire.
Stalemate Between Buyers and Sellers
Buyers and sellers seem to have reached a stalemate. pressmaster – stock.adobe.com
The National Association of Realtors tracked a weak summer of resales this year, and the overall rate of home sales continued to approach a three-decade low.
Delistings and Their Impact
As deals fall through, stubborn sellers are simply pulling their homes off the market. Delistings nationwide jumped 52% in September, according to Realtor.com data. Some of these sellers still enjoy low mortgage rates of years past, and aren’t in a rush to leave a good thing.
Personal Stories of Failed Home Purchases
One would-be homebuyer told the Journal that her dream home came to a screeching halt earlier this year due to economic uncertainty.
Trish DaCosta, a public relations professional, told the outlet that she saved for years to put in an offer on the three-bedroom Nashville home of her dreams. She had to back out of the roughly $400,000 sale after she was laid off.
“I’m grieving the loss of that house,” DaCosta told the Journal. “It’s really frustrating after years of saving and planning.”
Economic Factors Affecting Home Sales
The job market is showing serious signs of slowing, the New York Times previously reported, with August job growth weaker than expected and a prolonged government shutdown currently leaving scores of federal workers in the dark.
Record-high home prices in Florida are getting a reality check. EverydayAmazing – stock.adobe.com
Consumers are pulling back their spending across the board, including the housing market. Buyer fatigue over record-high listing prices, years of high interest rates and spiking homeownership costs — from property taxes or homeowners insurance — is palpable.
Regional Examples of Market Slowdown
Miami is a prime example of a market experiencing a buyer-seller standoff, according to Realtor.com. The city’s median housing market saw runaway pandemic-era pricing, but sellers are getting a reality check this year. The Sunshine State retreat saw the country’s second-biggest slowdown in listing durations in August, according to the outlet.
Florida, ever the bellwether of the country’s real estate market, is in the midst of a perfect storm of aging housing stock, sky-high insurance costs and easing demand.
Strategies to Secure Buyers
Sellers are enticing buyers by paying for preinspections and securing backup offers. Studio Romantic – stock.adobe.com
Jacksonville documented the highest rate of cancellations in September, the Journal reported, with 17.8% of deals falling through. A local realtor told the outlet that a recent contract in West Palm Beach fell apart over an expected $20,000 repair, despite the seller offering an equal discount on the sale price.
In response, the Journal reported, sellers everywhere are pulling out the stops. Paying for preinspections and securing signed backup offers number among their strategies to move indecisive buyers off the fence and into the front door.
Conclusion
The current state of home sales in the US is marked by a significant increase in cancelled deals, with about 15% of home-purchase agreements falling through in September. This trend is largely attributed to economic uncertainty, elevated costs of homeownership, and a stalemate between buyers and sellers. As the housing market continues to slow down, sellers are adopting new strategies to secure buyers, including paying for preinspections and securing backup offers.
FAQs
Q: What is the current rate of cancelled home-purchase agreements in the US?
A: About 15% of home-purchase agreements were cancelled in September, according to Redfin data.
Q: What are the main factors contributing to the increase in cancelled deals?
A: Economic and employment fears, paired with elevated costs of homeownership, are the main factors contributing to the increase in cancelled deals.
Q: How are sellers responding to the slowdown in the housing market?
A: Sellers are adopting new strategies to secure buyers, including paying for preinspections and securing backup offers.
Q: Which cities are experiencing a significant slowdown in the housing market?
A: Miami and Jacksonville are among the cities experiencing a significant slowdown in the housing market, with Miami seeing a buyer-seller standoff and Jacksonville documenting the highest rate of cancellations in September.
