Friday 27 May 2022 11:04 PM Sellers are slashing prices at levels not seen since before the pandemic as ... trends now
America's red hot housing market is cooling down fast sparking fears of a housing bust and crippling recession as nearly half of home sale prices are slashed in some areas.
After two years of buyers battling paying tens of thousands - or sometimes hundreds of thousands - over asking price to secure homes as millions fled the cities in favor of the suburbs during the pandemic, it appears the boom in over.
An increase in mortgage rates, rising house prices and uncertainty around Joe Biden's economy as inflation soars, are contributing factors to the slowdown, according to experts.
Weighing in on the market trends, former hedge fund manager Michael Burry of 'The Big Short' fame, said in a now-deleted tweet on May 24, that the falling stocks and slowing home sales, remind him of 2008.
Burry tweeted: 'As I said about 2008, it's like watching a plane crash.'
City's across the country have seen homeowners slash prices in a desperate attempt to sell
In a statement, the chief economist with real estate giant Redfin Daryl Fairweather said: 'The picture of a softening housing market is becoming more clear, especially to home sellers who are increasingly turning to price drops as buyers become more cost-conscious under higher mortgage rates.'
That came following a report from the company that said that the amount of home sellers lowering their prices reached it's highest level since October 2019.
The report says that one in five homes on the market across the country are seeing their prices lowered by owners.
Boise, Idaho, which saw an influx of out-of-state migrants during the Covid-19 pandemic, was the worst hit as 40% of homes on the market there saw a price drop in April 2022.
Cape Coral, Florida, was one of the most popular destinations for those who left the US's bigger cities during the Covid-19 pandemic
More than 40% of homes on the market in Boise, Idaho, saw their prices cut by owners in April 2022
Cities such as Cape Coral, Florida, New Orleans, Baton Rouge, have seen more than 30% of homes on their respective markets see their prices lowered.
A previous Redfin study found that Cape Coral was one of the most popular destinations for those who moved during the pandemic.
The city's population has risen nearly 10% in 2021 and 2022 with the majority of migrants coming from Chicago.
San Francisco that lost the most residents of any city during the pandemic, according to the study. The majority of those who left the city stayed in California, settling in the Sacramento-area.
While Los Angeles lost more than 50,000 residents, with the majority relocating to San Diego.
New York City lost 80,000 residents with the most settling in Miami.
