With pending home sales falling and asking price decreases more common, Richmond’s real estate market is showing early signs of slowing down.
Why it matters: We keep hearing a market crash is coming, but so far, local data doesn’t support that claim.
Yes, but: Monthly data shows early signs of a cooler market, even if it’s slight.
What’s happening: From May 2021 to May 2022, new listings were down 12% and pending sales were down 9.3%.
- More buyers are holding off as home ownership becomes too expensive — home prices are up 22.6% from June 2021 and mortgage rates recently surpassed 5% for the first time in 10 years.
- More sellers are dropping their asking price. There was a 5.2 percentage point increase in price reductions year over year in May, according to Redfin.
Zoom out: Nationally, mortgage applications were down 24%, and on average, 6.5% of sellers dropped their asking price each week in June, per Redfin’s latest market update.
- In June, national pending home sales were down 13% from this time last year, the largest decline since May 2020, Redfin’s report stated.
Be smart: Inventory is still critically low overall, which continues to push home prices up.
What we’re watching: New listings and pending sales. If more listings flood the market this summer and buyers don’t bite, that’s when we would start to see more power shift into buyers’ hands.
