If your home isn’t selling, take comfort in knowing you’re far from alone.
Normally, this time of year brings strong buyer activity thanks to favorable weather and families trying to move before the holiday season or the start of our local school year. But today’s market is facing a different reality. Persistent mortgage rates, affordability challenges and economic uncertainty have many buyers taking a more cautious approach.
That caution is showing up in the numbers. Nearly 15 percent of pending home sales nationwide fell out of escrow in June, the highest June cancellation rate recorded since Redfin began tracking the data in 2017. Many of those cancellations occurred during the inspection period, while others were driven by buyer concerns about affordability and the broader economy.
June wasn’t an isolated event. The increase in canceled transactions has been building for months. Redfin reported that 14.6 percent of pending sales fell out of escrow in May – the highest May cancellation rate since at least 2017 – followed by 14.9 percent in June and 15.3 percent in July, another record for that month. In other words, we’re not looking at a one-month anomaly.
For three consecutive months, roughly one out of every seven homes that went under contract failed to make it to the closing table. That trend reflects a market where buyers have more choices, more negotiating power and less willingness to overlook inspection issues, appraisal concerns or affordability challenges than they did just a few years ago.
The first thing sellers need to understand is that days on market are longer. Yes, you’ll still see headlines about homes selling in a weekend, but those are often outliers. More often than not, those quick sales are the result of a seller listening to their agent’s advice and pricing appropriately from day one.
Price remains the single most important factor. Many sellers start with a number they hope to walk away with after closing costs and then try to force the market to accommodate it. Unfortunately, the market doesn’t work that way. Even if a buyer agrees to an inflated price, there’s a good chance the appraisal won’t support it, creating another obstacle that can kill the transaction before closing.
The old strategy of pricing high “to leave room for negotiation” simply doesn’t make sense in today’s market. If you’re willing to negotiate tens of thousands off your asking price, you’ve already acknowledged the home was overpriced. Negotiations should focus on terms, timelines and contingencies – not correcting an unrealistic list price.
Sellers should also take an honest look at their property’s condition. The upgraded coffee bar, custom lighting or designer paint colors may matter to you, but buyers are increasingly focused on affordability and future maintenance costs. A home with deferred repairs will struggle to compete against one that’s move-in ready, regardless of cosmetic upgrades.
Finally, make your home easy to show. Restrictive showing schedules, excessive notice requirements or refusing weekend appointments can dramatically reduce buyer traffic. The more people who see your home, the better your chances of receiving an offer.
In today’s market, success comes from realistic pricing, proper preparation, and making it easy for buyers to say yes.
Theresa Grant is a real estate broker and columnist covering Lake Arrowhead, Crestline, Running Springs, and the surrounding mountain communities. Reach her at (909) 442-1345 visit www.HomesInLakeArrowhead.com, and follow her on social media @TheresaGrantRealtor. Theresa is a Broker Associate with REAL Broker Technologies. DRE#01202881.
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