Nearly 20% of Homes Reduce Prices in September, Indicating Shifting Buyer Market

Rising Inventory, Falling Prices: A September Snapshot of the Housing Market

In a significant development within the housing market, a new report from Realtor.com reveals that almost 20% of homes witnessed price reductions in September. This trend comes as a remarkable response to a consistently rising inventory of properties, which provides buyers with enhanced negotiating power. As buyers explore an ever-increasing range of choices, sellers of lower- and mid-tier homes are adjusting their prices to remain competitive. However, the luxury market appears largely insulated from these shifts, with minimal reductions noted at the high end.

Current Trends Favoring Buyers

Danielle Hale, the chief economist at Realtor.com, emphasizes that the current landscape is shifting in favor of buyers. She notes, “September’s trends indicate a housing market increasingly tilting in buyers’ favor, with rising inventory, prolonged days on the market, and more competitive pricing.” According to Hale, particularly advantageous opportunities are expected during the week of October 12-18, making this season particularly favorable for those looking to purchase homes.

Home price reductions are predominantly concentrated in the lower and mid-tier markets, with 21.6% of homes priced between $350,000 and $500,000 undergoing price cuts. In contrast, high-end listings (over $1 million) exhibited the least price volatility, highlighting a clear divide in market reactions based on property value.

Regional Analysis: Varied Trends Across the Country

The report reflects significant regional discrepancies in the occurrence of price reductions. For example, the Northeast recorded only 14.0% of listings experiencing price drops, while the South saw a noteworthy 21.1%. Notably, metropolitan areas like Portland, Denver, and Indianapolis experienced the highest percentages of homes with price cuts, often reflecting a slowdown in demand.

Even as price reductions remain prevalent, the overall number of active listings has grown substantially, recording a 17% increase compared to last year. However, Realtor.com reports this increase marks the 23rd consecutive month of year-over-year growth. Despite these gains, the inventory remains notably below typical pre-pandemic levels.

Long-Term Affordability Challenges

While the median listing price has stabilized at $425,000, the long-term upward trend in housing costs continues to challenge affordability for many buyers. The median listing price reflects no change from the previous year, but it has surged dramatically—up 36% since August 2019. This persistent rise highlights ongoing cost pressures impacting buyer decisions.

The average time homes remain on the market has also lengthened, with properties spending a median of 62 days—seven days longer than last year. This trend showcases a continued cooling in the market's pace, with slower sales timelines most pronounced in states like Florida and in regions of the West.

In summary, the housing market landscape as of September reveals a significant shift towards a buyer-friendly atmosphere, driven primarily by heightened inventory levels and substantial price reductions in lower- and mid-tier housing. Buyers are finding themselves with advantageous opportunities, while sellers are increasingly compelled to adapt their pricing strategies to make their homes more appealing in a competitive marketplace. As we progress into the peak home-buying season, the implications of these trends will be closely watched by both buyers and sellers alike.