Buyers are regaining leverage in property acquisitions across the country

The red-hot real estate market of the last few years continues to cool off, giving buyers more leverage to negotiate deals in the property market. With the low interest rates of the previous few years, buyers were rushing to get into the property market at all costs. This often resulted in bidding wars, where buyers have been bidding on properties above the asking price. 

The tide is shifting, though, and buyers are regaining some leverage. A combination of rising interest rates and price declines has put some of the power back into the hands of the buyers. The average home sold from early August to early September was 0.3% below its listing price. 

Redfin chief economist Daryl Fairweather noted that the bidding wars commonly seen in a red-hot market are all but over. “The only times you get homes going above list price is when there’s a bidding war, and those used to not be a regular occurrence,” said Daryl Fairweather, Redfin’s chief economist. “And we’re back to a place where bidding wars are unusual, not the norm.” 

The last time homes sold lower than the asking price was March 2021, which is indicative of the market we have been in. This is evidence of a more balanced and fair market and less skewed towards sellers. “It’s significant that now buyers know that when they’re bidding on a home, chances are they can get it for less than the asking price and without a competing offer, which was not the case earlier this year,” Fairweather noted. 

Still, this is not the case in all regions, as the data analyzed over the four weeks showed that 37% of homes sold above their listing price. This is down from 50% the previous year, however. Interest rates are now at 5.89%, the highest since November 2008, and more rate hikes are possible on the horizon. We could see some more pain in the property market, but this could give home buyers the chance to negotiate better deals. 

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