Offering someone who's selling a home a little below the asking price can often feel like a long-gone reality -- in certain popular cities, inventory is so out of sync with demand that the bidding wars begin almost as soon as a home hits Redfin (RDFN) or Zillow (ZG).
As this is particularly the case for homes priced below a given area's median, many first-time buyers saving for a down payment have a particularly difficult time beating out investors who can pay cash upfront or make a bigger offer to secure the property both want.
But the real estate game is also all about timing and, in certain cities, months of rising interest rates have cooled buyer excitement and led to very recent drops in demand. Realtor.com compiled a list of American cities with the biggest inventory increases, days homes spent on the market and drops between asking and sales prices.
A high combination of the three means that a potential buyer is much more likely to get a lower offer accepted and Rocky Mount in North Carolina came out on top -- the 55,000-person town 45 miles outside of Raleigh had seen a spike in popularity during the early days of the pandemic and is now recovering from that.
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"What that’s created [...] is an environment where sellers want to list for top dollar -- even if that might not work to their advantage," Realtor.com writes based on the observations of local real estate agents.
The average home price went from $131,000 in October 2019 to $275,000 two years later.
The same situation can be seen all over the country in towns that saw a spike of remote workers during the pandemic.
Current sellers maintain the optimism seen during the height of their area's popularity but, after seeing properties languish for a few months, may be willing to negotiate down from an initially ambitious asking price.
Pennsylvania's East Stroudsburg, New Hampshire's Concord, Wisconsin's Eau Claire and Florida's Lakeland all made the top five list despite many making different lists of "towns to invest in" after seeing waves of new residents come during the pandemic.
Realtor.com
Now Is The Time To Negotiate Down In Overinflated Housing Markets
"In Lakeland, this large four-bedroom home on one-third of an acre was marked down $45,000 -- more than 10% -- at the end of October, after two months on the market," Realtor.com wrote.
The larger picture is not so much of a housing crash (prices in many of these locations are still rising fast) as much as a correction for cities whose job prospects and population cannot reasonably sustain the spike in I'm-going-to-move-to-a-quiet-place popularity during the pandemic.
But for those committed to living in these cities, the opportunity may have finally come calling as the developers move on to other places and sellers adjust to not seeing the buyer interest they had anticipated when they saw neighbors sell 12 months earlier.
Quashed developer expectations may, in other words, be good for buyers.
"Yes, they are emerging markets with promising economies," Realtor.com Senior Economist George Riatu said in a statement. "Yes, they are popular for newcomers. But are they possibly overpriced, given local earnings? It seems so."
SEE THE FULL LIST OF CITIES WHERE YOU CAN NEGOTIATE HOME OFFERS HERE.
