According to the statistics by the Redfin agency, the share of listed US homes whose prices were reduced reached record highs this July. Such cases are likely to become more numerous in the future.
In May 2022, sales of existing residential properties dropped to a minimum level since June 2020. After a decline caused by the COVID-19 pandemic, the market started to recover. Sales grew, for instance, in the northeastern states, but dropped in almost all other regions, including the Mid-West, the West, and the populous South.
The supply level is still lower than desirable, so prices remain high, although sellers are reducing the asking prices in some regions where buyers used to compete in bidding wars.
David Berson, Chief Economist at Nationwide in Columbus, Ohio, explains that the sales of existing homes will keep reducing throughout 2022, as the mortgage rates increase. He believes that the current crisis is quite severe but a drastic slump in sales, like the one in 2008, is not to be expected, unless the USA experiences new economic challenges.
Unless a profound and long economic recession occurs, sales of residential properties will not reduce too much, but prices in general will keep growing incrementally.