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- Redfin found that 70% of home sellers in Boise, Idaho, dropped their asking prices in July.
- Housing markets in Boise and other popular places to move to are finally starting to cool.
- Brokers in seven hot spots shared the signs of slowdowns they're seeing.
Are pandemic boomtowns finally going bust?
At the very least, they're starting to come back down to earth.
Researchers at the brokerage Redfin found that 70% of home sellers in Boise, Idaho, dropped their asking prices in July — a greater share than in the 96 other cities they analyzed. In Denver, just under 60% of homes for sale had price drops in July.
Boise and Denver are among the cities whose populations jumped during the pandemic as homebuyers flocked to areas with less expensive homes and ample outdoor space. Record-low mortgage rates made borrowing money cheap, so buyers flush with new loans fought each other in bidding wars for a small number of available homes. As a result, home prices shot up, pricing out many locals.
But now those red-hot housing markets are cooling, according to housing-market data and local real-estate agents.
Yes, sellers are cutting their asking prices. But also, there are more homes for sale. They're lingering on the market longer before being sold.
A slowdown doesn't mean that the housing marking will crash, or even that home prices will fall. It does mean, however, that buyers in these places finally have more power and can afford to be choosier — opting not to waive inspections, or just to take a few more days to mull over the biggest purchase of their lives — and still score a house.
Real-estate agents are on the front lines of cooling markets. They see the dynamics between buyers and sellers long before Redfin and other number crunchers aggregate monthly housing-market data.
Brokers in seven pandemic boomtowns — Boise; Denver; Ogden, Utah; Bozeman, Montana; Nashville, Tennessee; Austin, Texas; and Phoenix — shared their firsthand accounts of their local markets cooling.
Last summer, Christina Ward was juggling buyers so ravenous for real estate that they'd bid on homes the moment they hit the market.
"We would throw out a piece of meat, and the dogs would attack it," she told Insider.
But the fever has broken, and buyers aren't as hungry. Homes are still selling, but they'll be on the market for 18 days, not three.
She said the power was shifting to the buyers, who feel emboldened to push back in negotiations again.
Ward said that in one recent case, buyers negotiated to buy a home for less than its $900,000 asking price on the condition that they wouldn't insist on any repairs. Then, perhaps feeling like a slowing market gave them the upper hand, the buyers went ahead and requested $22,000 worth of repairs.
The deal fell apart — but the key difference is that the buyers felt they could ask, whereas buyers had previously been ready to overbid, waive all contingencies, or make other sacrifices to get a home. Ward said she even saw one buyer offer the use of their second home to a seller as part of a bid.
Now the table feels more even. "We're back to a normal market where we're negotiating," she said.
For the past two years there haven't been many homes for sale in Ogden, Utah, a city about 30 minutes north of Salt Lake City.
Susan Boyer, a real-estate agent in Ogden with JPAR Silverpath, said the number of homes on the region's listing service was as low as 800, well below the roughly 8,000 she said was typical before the pandemic.
"There were bidding wars constantly," she said. "You'd have 50 offers on one; when it came on, it was only on for a couple hours. It was just insane."
But she said she'd seen a major shift in the market in recent months — the number of homes for sale was nearly 9,500 in July. As transactions slow, she said, bids and sale prices are "normalizing" rather than declining.
"You're not going to be able to — like you did for two years — just go, 'Oh, the neighbor's house sold for $430,000 last week, so this week I'm going to put mine at $470,000 and expect $500,000,'" she said.
Boyle recalled working with a buyer who was scared of being outbid in the wild market. In late July, she said, she found him a townhome for $279,900 — a week after a similar house sold for $290,000. What's more, the seller agreed to pay $5,000 of his closing cost.
"If this one had come on the market even earlier this year or last year, it would've had a bidding war, and he would've had at least five to 10 offers all over asking and with crazy concessions" to the seller, she said.
Everdawn Charles, a real-estate agent for Keller Williams in Bozeman, said the region's boom started in 2017.
Then the pandemic arrived, and the mountainous ski city became even more popular for remote workers and people ready for a change of pace.
"We got hit like a Mack truck in September of 2021 with the influx of people," Charles said.
At $743,500, the median sale price in Bozeman in July had climbed by nearly 20% year-over-year and far exceeded the national median of $440,300, according to data from Bozeman Real Estate Group and the Federal Reserve Bank of St. Louis.
But rising interest rates have cooled the market, and listings are coming back down to earth, Charles said.
"A lot of homes that were priced a little higher than they should be are having price reductions consistently," she said. "We're having almost as many price reductions as we are homes coming to market every day."
Lindsey Fenton, a Douglas Elliman real-estate agent in Austin, said that while the city remains a seller's market, homebuyers are gaining more power as demand cools.
"Home prices are still yielding really high, but buyers are becoming more selective as they now have more time," Fenton said.
Fenton attributed buyers' newfound power to an uptick in housing inventory.
"If a home is listed on a Thursday and a homebuyer is unable to see it, they're fine waiting until the following week to go take a look," she said. "Because inventory has picked up, there's just more options out there. So they're OK potentially letting something go."
Austin's homebuilders have been busy this year. The city's housing inventory climbed by 145% in June over the previous year. In Travis County, the city's most expensive county, inventory has increased by 159% year over year. That supply has had a noticeable effect on the market, which is softening for other reasons, too, Fenton said.
"Before, you would list a home on a Thursday, and buyers were having to make decisions by Sunday or Monday," Fenton said. "Now they are able to sit and think for a bit and then submit their offers."
Ben Jasek has had to lower the expectations of Nashville sellers ready to list their homes.
Many are still "bullish," he said, expecting the all-cash over-asking-price offers that became standard during the past two years. Zillow data suggests that in that time, median home values grew by 50%.
"We've been spoiled by this crazy, crazy market," Jasek said. "Everything is just statistically taking a little bit longer right now."
The market has shown signs of a shift. In June, he said, a three-bedroom, 2 1/2-bathroom home in the North Nashville neighborhood was listed for $675,000. A seven-minute drive from downtown, and outfitted with trendy white-quartz countertops, the home would've sold in about 10 days earlier this year.
But it took nearly 45 days to get under contract. The price was reduced to less than $600,000.
"We kind of missed the boat of the market just a little bit," Jasek said.
Phoenix has been one of the nation's most competitive real-estate markets, but rising housing costs have weakened buyer demand in the city.
Fern Coelho, an agent with Jason Mitchell Real Estate, says the shifting market dynamics are benefiting her clients.
"The housing market is definitely slowing down," Coelho said. "A lot of the homebuyers that weren't able to submit offers or get them accepted three to four months ago are now able to get an offer accepted."
That's in part because many would-be buyers are priced out of the market. Over the last two years, Phoenix has had the fastest-growing home prices in the nation.
Now, though, people who can still afford to buy a home are seeing a lot less competition and thus have more flexibility in their purchasing decisions.
Indeed, Coelho said, sellers are losing their leverage. She added that they have to sweeten deals for buyers, with one even offering a buyer cash that the buyer needed to get a lower interest rate on their loan.
"People are willing to negotiate and make a deal happen in order to get it closed," she said, "whereas four to five months ago buyers were having to waive inspections appraisals."
Between summer 2020 and the end of 2021, the Denver housing market was a whirlwind of activity as office workers, unchained from their desks, made the Mile High City their new home.
The median sale price of homes in the city skyrocketed to $573,000 in November 2021 from $369,000 in July 2020, according to Realtor.com — a 55% increase a year and a half.
Bonnie Hissey, a real-estate agent in Denver, said everyone seemed to jump on the homebuying bandwagon, particularly from January to May of this year.
"I just ran out of words for it," Hissey said. "It was brutal. It was absolutely brutal."
The extreme seller's market pushed prices so high that bids 20% over the asking price were not unusual and nearly every deal was decided by a bidding war. It was stressful for buyers — and for brokers.
"I can't tell you how many times I just started spontaneously crying because I was like, I'm going to be put in a hospital if I can't stop working seven days a week," she said. "I had, like, seven straight months right before May where I was on all the time."
Finally, that period of wild demand and dwindling supply is cooling — and fast. Redfin found that more than half of listings in the city had price drops in July.
At the start of summer, Hissey said, she started to see "shards" of a slowdown. One of the first indicators was more one-bedroom condos lingering on the market.
Buyers became choosier. Hissey recalled some house hunters touring properties that months earlier would have flown off the market — this time, she said, they just said, "Nope."
Hissey said she was grateful she'd recommended some sellers list their homes earlier this year. She remembered telling a client she thought they did the right thing by selling in the late spring; the client replied, "Thank God we did this."
"It's long overdue and, in my opinion, welcome," Hissey added, "just to try and get some balance back in the market."
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What are pandemic boomtowns? ›
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Boise housing becomes a buyer's market
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Definition of ghost town
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- Charleston-North Charleston, South Carolina. ...
- Houston, Texas. ...
- Sarasota-Bradenton, Florida. ...
- San Antonio, Texas. ...
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