The U.S. housing market is showing signs that it is slowly emerging from the downturn brought about by the pandemic. Low inventory and growing buyer demand are pushing prices up, but one study has revealed that there are still sellers that price their homes lower than market levels despite the demand.
The May housing data has revealed that the national median listing price has grown by 1.6 percent year-over-year while inventory is still declining. As buyer demand continues to grow and sellers still reluctant to re-enter the market, is it even possible to find bargain houses this summer?
According to the recently released COVID market report from Weiss Analytics, there are still thousands of homeowners who are discounting their homes. Some markets are having price cuts ranging from 2 to 11 percent below the pre-March 11 market levels or before WHO declared the coronavirus pandemic.
The top three markets with the most significant percentage of new listings discounted since February 15, 2020, were El Paso, TX (59 percent) with a median price of $214,400; San Antonio-New Braunfels, TX (57 percent) with a median price of $254,977.25; Killeen-Temple, TX (54 percent) with a median price of $ 225,062.50 as of May 23, 2020.
Of the top 25 markets with the highest discounted listings percentage, at least 25 percent of their new listing were priced lower than pre-March 11 levels.
The price discounts are brought about for many different reasons, Weiss Analytics CEO and co-founder of Case Shiller Weiss, Allan Weiss said. The steep decline in April sales, he said, has motivated many sellers to discount their homes.
Homeowner equity is also at its historic high, making it easier for many equity-rich homeowners to decide to unload their property so they can start rebuilding their lives after the pandemic. Some may just want to sell their homes quickly so they can upgrade or relocate.
Some markets are rebuilding their inventory as new listings come in after plunging due to the pandemic. Still, Weiss noted that this increase in supply is not directly affecting the price discounting.
Tight supply and rising prices in many housing markets may be attributed to the fact that many were able to stay and retain their cash because of forbearance. But such market conditions and changes in their situations may have also motivated them to sell quickly, the report added.
The pandemic has caused the price growths to slow down in most markets and lower housing market forecasts for the remainder of 2020. The market condition and price discounting have, however, created opportunities for investors and homebuyers who have, for the last four years, struggled to find affordable homes to buy.
The latest REALTORS® Affordability Distribution Curve and Score, meanwhile revealed the top metros across the nation where affordable homes are available which includes Des Moines-West Des Moines, IA with a median listing price of $269,800; Baton Rouge, LA with a median listing price of $248,800; and Atlanta-Sandy Springs-Roswell, GA with a median listing price of $325,050 as of April 2020.
Read more about this topic here: These Are the Metro Areas Where You Can Still Find Affordable Houses to Buy
