Time-to-sell decreases, but price cuts rise

In what is becoming a bifurcated housing market, the median time to sell a home remains relatively quick, but the share of sellers that decided to reduce the price was the highest in over a decade, Zillow said.

In the U.S. during March, it took on average 13 days for a home to sell, but certain markets are laggards. For example, homes sold in Kansas City, Missouri and Columbus, Ohio were at a rapid 4 days from listing.

On the other hand, in Miami, the median time for a property to go from listing to pending sale was 35 days, followed by San Antonio at 34 days and Jacksonville, Florida at 32 days.

"Shoppers in the market today should expect competition, especially for attractive listings on the lower end of the price range — a rare opportunity these days," said Skylar Olsen, Zillow's chief economist in a press release. "That's kept prices ticking upward in most areas, despite affordability challenges."

Other market data also supports this dueling thesis of more acceptance of higher rates — the Mortgage Bankers Association reporting a loosening of credit — versus a more pessimistic consumer as seen in the downturn of the Fannie Mae Home Purchase Sentiment Index.

In some markets, new construction has provided some relief for both rising prices and competitive pressures, but not in the most expensive areas.

"In costly areas, homeowners hold extensive mortgage debt at previously low rates, and the pressure is dialed up even further," said Olsen.

The median age of listings on the Zillow website is 43 days, which the company attributed to some homes being difficult to sell. However, that was 10 days shorter than in February.

The median days from listing to pending is likely to continue to decline in April and stay low in May, the Zillow report said.

Meanwhile, during March, 20.6% of sellers decided to reduce the listing price, the highest percentage in more than a decade. This was about five percentage points higher than pre-pandemic norms. In February 20.1% of sellers had a price cut.

Separately, a growing number of sellers are being more realistic about the state of the housing market, a Realtor.com survey said.

The typical person who said they were looking to sell in 2024 had been thinking about listing at some point within at least the past two years, with nearly 59% of survey respondents stating they had been considering this within that time and another 33% for between two and three years.

"Plenty of homeowners have been eagerly waiting for mortgage rates to come down so that they can sell their current home and more affordably upgrade to a new one," said Realtor.com Chief Economist Danielle Hale in a press release. "With mortgage rates expected to ease slowly throughout the year, some potential sellers are planning to get off the sidelines in 2024 and make a move, with the majority expecting to buy a new home at the same time that they sell their current one."

Among those then-homeowners that completed a transaction last year, nearly eight in 10 wished they had listed earlier to take advantage of that red-hot environment.

This survey of 1,003 respondents planning to sell their home in the next year, and 1,000 respondents that did so in the last year, took place between Feb. 22 and March 4.

For the first few weeks of this year, mortgage rates were around 6.6%, according to Freddie Mac. Right around the time of the survey, they zoomed back up to near 7%. Some sites, including National Mortgage News, which gets data from LenderPrice, have the 30-year fixed well above 7% as of April 15.

Rates are playing a role in the decision making, with just under half of potential sellers planning to wait until they decline before acting. Another 29% want to wait, but said they need to sell soon for personal reasons. But 21% don't feel they are locked in to their current home because of where mortgage rates are.

In the Realtor.com survey, just 12% expected a bidding war on their listing, compared to 27% in 2023. Meanwhile, only 15% thought the property would sell above their asking price, down from 31% last year.

The latest sales price data from the Zillow report was from February and found that 26.6% of homes sold above their list price, compared with 24.2% a year ago, and 20.6% in February prior to the pandemic.

Meanwhile, among Realtor.com survey participants, 15% expected to have an offer within a week after listing, down from 37% in 2023, and 15% expect buyers to be willing to forgo contingencies like inspections and appraisals to make the deal, down from 35% in 2023.