Real estate sales in Florida:
Farewell to the moon prices.
More than every second home seller now grants significant price reductions
Photo: Getty Images
The past two years have been heavenly times for home sellers in the Denver (Colorado), Tampa (Florida) and Phoenix (Arizona) regions.
Countless high earners stormed the local real estate markets in the hope of getting hold of a nice and quiet place to work in the home office.
"These stories circulated that the neighbor had sold his house for an exorbitantly high price within a very short time because the prospective buyers were already queuing up the first weekend after the sale was advertised," says
Shauna Pendleton
, a realtor at online real estate broker Redfin.
"Of course, that led to unrealistic price expectations."
But those times are over.
Rising interest rates are causing homeowners who were only recently asking for fantastic prices to back down their asking price in the hope of finding a buyer after all.
According to calculations by Redfin, more than 50 percent of home sellers in the former boom regions of Denver, Tampa, Sacramento, Phoenix, San Diego or Portland significantly reduced their prices in July, according to a Bloomberg report.
Nationally in the US it is more than 20 percent.
That's the highest percentage in more than 10 years, according to Redfin.
There are several reasons why house prices are not only falling in the former boom regions.
The US Federal Reserve is combating high inflation with a series of interest rate hikes, and interest rates of more than 5 percent are now due again in the USA for a real estate loan.
Ascending trend.
Added to this are the uncertain economic prospects and the fear of a recession.
Many of the tech companies that paid record starting salaries just a few months ago are now planning to cut thousands of jobs.
"Homeowners have adapted quickly to the new realities," says realtor Pendleton.
"Anyone who really wants to sell their house within a reasonable period of time is now offering significant price reductions."
This trend has increased since the summer.
Even if the number of corona infections should rise again in autumn, nobody expects a home office wave similar to that of 2020 and 2021. The time of peak prices on the real estate market in the USA is over.
In the eurozone, interest rates are rising much more slowly because the ECB is worried about the heavily indebted southern European countries.
However, rising mortgage interest rates and the looming recession have already caused the real estate market in Germany to cool down noticeably.
A good time for prospective homebuyers to negotiate discounts.
la
