Sellers Trim Prices as Inventory Gives Buyers More Leverage

The latest September Monthly Housing Trends report from Realtor.com shows that sellers are increasingly adjusting their asking prices in response to rising inventory, which gives buyers more leverage in the market. Nearly 20% of homes saw price reductions in September, reflecting a shift toward a buyer-favored market, particularly in lower- and mid-tier segments. Sellers in the luxury home market are more patient, with only 13.3% of homes priced over $1 million seeing reductions.

The most significant price cuts occurred in homes priced between $350,000 and $500,000, with 21.6% of listings in this range adjusting their prices. This is a common trend in mid-range homes, where first-time buyers and downsizers are highly active. Meanwhile, luxury homes benefit from lower turnover and less urgency from sellers. The overall price reductions were up 1.2 percentage points compared to September 2024, and this trend is expected to continue as seasonal trends align with further price cuts.

Regionally, the South had the highest rate of price reductions at 21.1%, while the Northeast had the lowest at 14.0%. Some metro areas, like Portland, Denver, and Indianapolis, saw even higher reductions due to slower demand.

Active inventory continued to grow in September, rising 17.0% year-over-year, which is keeping the total number of available homes above 1 million for the fifth consecutive month. However, inventory growth has slowed since the summer peak, and while there is more choice for buyers, the overall supply remains below historical norms, particularly in high-demand areas.

Takeaways:

For Buyers: The market is becoming more favorable, especially in mid-tier homes. Seasonal trends suggest that the early to mid-October period may offer additional advantages.

For Sellers: Sellers of lower and mid-tier homes must be more flexible with pricing, while those in the luxury segment can afford to wait for the right buyer.

For the Market: The overall housing market is seeing a gradual shift towards a more buyer-friendly environment, though supply constraints in high-demand markets still influence the market dynamics.

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