...
By Giulia Carbonaro
Senior Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
After the homebuying frenzy that characterized the pandemic years, when buyers fought in ruthless bidding wars across the country to snatch the limited inventory available, sellers are having a hard time adjusting to a much slower housing market.
In seven markets analyzed by the real estate intelligence platform Parcl Labs, sellers were pricing their homes so much higher than buyers were willing to purchase them for that they were considered “delusional.”
What many of these markets have in common—with three out of the seven being in Florida—is that they have faced a starker correction since the end of the pandemic than the rest of the country, as inventory surged while demand was falling because of slower domestic migration, rising costs and growing economic uncertainty.
Read More on News
Where Are Home Sellers Delusional About Their Asking Prices?
These are the seven housing markets where sellers are most delusional about the price they can fetch for their homes, according to a Parcl Labs’ analysis:
- Honolulu, Hawaii
- Phoenix, Arizona
- Houston, Texas
- Cleveland, Ohio
- Deltona, Florida
- Cape Coral, Florida
- Jacksonville, Florida
In urban Honolulu and Phoenix, about 95 percent of starter homes are priced above what would be reasonable for buyers in the metros. In Houston, that figure is 94 percent; in Cleveland, 89 percent; in Deltona, 87 percent; in Cape Coral, 84 percent; and in Jacksonville, 82 percent.
In Honolulu, the current sale price of a typical home is $608.52 per square foot, according to Parcl Labs, down 2.8 percent from a year ago. Of a total of 4,608 active listings in the city, 32 percent have taken a price cut.
In Phoenix, a typical home costs $242.37 per square foot, down 2.5 percent from a year ago. Of 27,891 active listings, 45 percent have a price reduction. Homes in Houston are cheaper, at $166.63 per square foot. Still, 44 percent of the total 43,527 active listings have a price cut.
In Cleveland, a typical home is sold for $145.61 per square foot, up 11.6 percent from a year earlier. Some 34 percent of 6,429 active listings have had their original asking price slashed by sellers.
When it comes to Florida, Jacksonville has the lowest home price, at $199.92 per square foot—down 1.54 percent year over year. In Deltona, a home goes for $202.81 per square foot, a price 3.02 percent lower than a year earlier. In Cape Coral, it costs $212.37 per square foot, 7.15 percent less than a year earlier.
How Are Sellers Reacting?
At the national level, sellers now outnumber buyers, who have retreated to the sidelines because of sky-high home prices and still elevated borrowing costs.
Many are slashing prices to attract cautious and reluctant buyers, some are pivoting to rentals, and others are taking their properties off the market entirely.
Some, however, are stubbornly trying to sell their homes for the same prices they would have fetched a couple of years ago. According to a new report by Parcl Labs, 30.2 percent of the over 3 million homes listed for sale in the U.S. this summer are still on the market, their prices unchanged. Almost as many—27.3 percent—had their price reduced by sellers.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines