Home prices and seller behavior are shifting as the housing market tilts in favor of buyers, with a growing number of home sellers in Southern California lowering their asking prices, according to recent data.
A Redfin analysis of MLS data showed that during the four-week period ending September 20, 19.5% of active listings in the Anaheim area saw price drops, marking a 3.2 percentage point increase compared to the same period last year.
In Los Angeles, the share of price-reduced listings reached 16.5%, up 2.1 percentage points from a year prior. Riverside recorded 17.8%, a 1.7 percentage point increase, while San Diego saw 21.7% of sellers lower their prices, up 2.9 percentage points year-over-year.
This trend is not limited to Southern California, as price reductions are rising nationwide. During the same period, 21.1% of home listings across the country underwent price cuts, up from 19.8% last year and marking the highest level recorded since Redfin began tracking these statistics in 2022.
However, Redfin’s analysis notes that the overall increase in price-reduced listings remains relatively modest given current market conditions. Even though housing demand has plateaued, competitive bidding has decreased, and homes are lingering on the market longer, the rate of price cuts has seen a limited rise.
This is partly because an increasing number of sellers choose to pull their properties off the market entirely if they fail to fetch their desired price. Additionally, rather than continuously reducing prices after listing, more sellers are setting realistic initial asking prices that reflect current demand and mortgage rate conditions.
High mortgage rates remaining above 7%, ongoing economic uncertainty, and stagnant inventory lingering on the market have collectively fueled these price adjustments.
Asaad Khan, a senior economist at Redfin, explained that sellers who demand excessively high prices often rely on outdated comparable sales or remain overly optimistic about the possibility of competitive bidding wars.
Meanwhile, buyers maintain substantial negotiating leverage. Redfin emphasized that a restrained increase in price cuts does not indicate weakening buyer power.
Buyers of homes sitting on the market for over a month are increasingly submitting offers below asking prices or demanding concessions such as repair credits, closing cost assistance, and mortgage rate buy-downs.
According to Redfin, nearly half of recent home buyers successfully secured these incentives or special accommodations from sellers.
