It is too soon to declare the housing market as fully affordable, given that prices and borrowing costs remain high. However, some signs suggest a shift toward a more buyer-friendly housing market, at least in certain areas.
An economic researcher at Redfin notes that there are specific rules of thumb to identify a buyer’s market, such as having more than four months of housing supply. While conditions are improving, she comments, “Things are better, but they’re not great yet.”
Similarly, a senior economist at Zillow states, “We’re still nationwide somewhat in a seller’s market, not a buyer’s market yet. However, there’s good news for buyers on the horizon.”
Here are some indicators that may suggest your local housing market is becoming more favorable to buyers:
- Homes are lingering on the market longer: About 64.7% of homes listed in June had been on the market for at least 30 days, a 9.2% increase from the previous year, according to Redfin. Zillow reports that homes are on sale for 46 days, compared to 35 days last year and 19 days in 2021.
- Buyers are backing out: Some buyers are withdrawing from escrow just before closing, often due to unexpectedly high monthly costs after receiving insurance and tax estimates. In certain California areas, buyers are finding it challenging to secure property insurance.
- Sellers are cutting prices: To attract buyers, sellers are increasingly reducing prices. About 1 in 5 homes for sale in
June had a price cut, marking the highest level of any June on record, according to Redfin.
While the California housing market may not be as buyer friendly as in other regions, it has become somewhat more neutral compared to recent years.
