Redfin’s CEO, Glenn Kelman, believes that home prices will decrease this summer as homeowners give in to selling pressures. The real estate brokerage expects a 1% drop in prices by the end of the year, with homes in Florida and Texas already experiencing significant price cuts.
According to Kelman, homeowners who have been waiting out high mortgage rates are realizing that they can no longer delay moving. This has led to an increase in available inventory and a subsequent decrease in prices, particularly in key markets like Florida and Texas. In May, over 6% of US home sellers issued price cuts, the highest proportion in over a year, indicating a shift towards more affordable housing options.
Kelman notes that many homeowners are facing personal circumstances that require them to sell their homes, such as divorce or growing families. This, coupled with an increase in newly listed homes, has contributed to a rise in available inventory and a softening of prices in the housing market.
Despite the emotional attachment that homeowners may have to their properties, Kelman believes that prices will continue to fall throughout the summer. Redfin predicts a 1% decline in home prices by the end of the year, although Kelman acknowledges that prices may remain sticky due to homeowners’ reluctance to lower their asking prices. However, he still anticipates a softening of prices in the coming months as more homes enter the market.
