The real estate industry in the United States is about to undergo a significant change as new rules governing agent commissions will come into effect on August 17. This change is part of a legal settlement between the National Association of Realtors and home sellers, marking a shift in the traditional practices of the industry.
According to a recent report from Realtor.com, the supply of homes for sale remains low compared to historical standards, but it is rising steadily. Nationwide, active listings in August saw a 36% increase compared to the same month last year, marking the 10th consecutive month of annual growth. However, supply is still 26% lower than it was in August 2019, pre-pandemic.
As inventory grows, sellers are adjusting their strategies, leading to fewer new listings in August compared to the previous year. Homes are also staying on the market longer, prompting price cuts and moderation in asking prices. Mortgage rates have declined due to the widely anticipated Federal Reserve rate cut, but some buyers and sellers are holding off in anticipation of further declines.
The rise in supply is particularly noticeable in certain cities, with Tampa, Florida, seeing a staggering 90% increase in inventory compared to a year ago. Other cities like San Diego, Miami, Seattle, and Denver have also experienced significant gains in inventory.
Regionally, active listings have risen by 46% in the South, 35.7% in the West, 23.8% in the Midwest, and 15.1% in the Northeast. This increase in supply has resulted in homes spending more time on the market, with the typical home taking 53 days to sell in August, seven days longer than the previous year.
Moreover, the market slowdown is translating into lower prices, with the share of homes with price reductions increasing to 19% in August. The median list price has decreased by 1.3% year over year, although prices are still significantly higher compared to August 2019.
Overall, the changing dynamics in the real estate market signal a shift towards a more balanced market environment, with implications for both buyers and sellers. It remains to be seen how these developments will impact the industry in the coming months and whether further adjustments will be necessary to align with the evolving market conditions.
