For the past eight months, Chet Gallaway has been trying to sell his house in the Bay Area.
The house in San Carlos was constructed by Gallaway’s father in the 1970s, and Chet resided there until relocating to a new residence two hours north of Sacramento. The property, which is listed for around $3 million, was rented by Gallaway. The house was paid off, so he wasn’t in a haste to sell.
However, he didn’t anticipate it being this sluggish or so challenging. Gallaway told MarketWatch, “I personally expected it to sell very quickly,” given he and his father share ownership of the house.
He reduced the home’s price from $3.5 million to $3 million since he was not receiving any valuable bites. However, he was receiving what he regarded as lowball offers. “I think people are just less willing to plunk down millions of dollars for a property,” he continued, referring to the economic uncertainty surrounding the new policies of the Trump administration.
Ryan McDonough is dealing with a similar issue about 800 miles away. As his family grew, he was seeking to purchase a house nearer Phoenix when MarketWatch last met with him. He made an offer on a house in Phoenix in January, and the deal was completed in three weeks.
Selling his current home in Prescott Valley, which is roughly 90 miles outside of Phoenix, has been a costly ordeal, in sharp contrast to the short timeline for purchasing his new home. He told MarketWatch, “We’re hoping we made the right decision” in purchasing. “But right now, having two mortgages and two utility bills, two homeowners association [fees] … we’re really bleeding.”
The abnormally slow pace of what is often a busy season for the real estate sector is reflected in the experiences of the two house sellers.
Existing house sales dropped to a six-month low in March as alarmed purchasers withdrew from the market due to job and economic uncertainties.
In March, existing-home sales decreased by 5.9% overall to a pace of 4.02 million. If monthly sales continued at the same pace as in March, it’s the total number of homes that would be sold in a year. Seasonal adjustments are made to the data.
The sales decline was the largest one-month decline since November 2022, and the rate of sales is the slowest since September 2024. Additionally, the March sales pace was the worst since 2009, when the global financial crisis was at its worst.
“I had hoped that this year would bring about a significant rebound in sales. It’s not occurring yet,” NAR head economist Lawrence Yun stated during a press conference.
March saw a 2.4% decrease in home sales compared to the same month last year.
The Wall Street Journal and Dow Jones Newswires polled economists, and their predictions were not met by the sales rate. In March, they anticipated that the pace of home sales will slow to 4.13 million.
Related: As they deal with numerous aspects of economic uncertainty, distressed homebuyers are leaving the real estate market.
In March, home prices reached a record high.
The problem of affordability still plagues homebuyers. According to the NAR, the median price of an existing home in March was $403,700, the highest amount ever recorded for that month. The national price rise was 2.7%.
Interestingly, the median sales price of a newly constructed home was nearly identical to that of an older property. The median price of a new house in March was $403,600. The average new home is typically far more expensive than the average old home, so this was “unusual,” according to Yun of the NAR.
The Northeast saw the largest increase in home prices in March, at 7.7%. The market in the area is usually more supply-constrained. In the Northeast, the median price of an existing home was $468,000.
21% of homes nationwide were sold for more than their list price, which remained constant from the previous month. On average, 2.4 offers were made on listed properties.
Homes that were more expensive were nevertheless selling faster than those that were more reasonably priced. Among all price groups, sales of homes over $1 million increased 13.8% in March compared to the same month last year. Sales of homes between $750,000 and $1 million up 8.6%.
26% of sales were made to all-cash customers. Individual investors and second-home purchasers made up 15% of the total.
In the meantime, first-time buyers purchased 32% of the properties sold.
Selling in a weakening real estate market might be difficult.
The average length of time listed homes were on the market was 36 days, up from 33 days in March of previous year, according to the NAR data.
More sales were canceled even though contracts concluded in 30 days on average, which was the same as a year previously. Compared to 10% a year earlier, 13% of contracts had been delayed in the last three months, according to statistics from the NAR poll.
Additionally, some homeowners that are selling may have to wait much longer.
As a farmer and real estate investor, Gallaway is not interested in continually lowering the asking price in order to sell the house he and his father own. His nearly 80-year-old father, who owns a vineyard, has no objections to the transaction. “He says, do what you want, handle everything – just let me know how it turns out,” said Gallaway.
Gallaway is not overly worried because there is no rush. According to him, “if I had to sell it, then of course I would just feed into the death spiral and just drop the price” until an offer was made. “We just don’t need to sell badly enough to capitulate.”
McDonough, meanwhile, does not have the luxury of time in Phoenix. He is concerned because the couple listed their previous house in early February, but it hasn’t sold yet. He has been making payments on two houses since he finished buying his new home in Phoenix in January. The wait was longer than he had anticipated. However, it was in Phoenix. “We sold in 2020 and had no problem, even with COVID,” he said.
As their house is up for sale, the financial strain has been increasing. It was listed at $630,000, but they lowered the price to $609,000. McDonough has to deal with the resumption of student loan payments in addition to his two mortgages, which total roughly $6,000 a month. He had planned to use the money from the sale of the house to settle a significant portion of his student loan debt.
In order to support the family until a new owner takes over their former house, McDonough stated, “I’m beginning to think like I might need to go in with my financial assets and borrow from 401(k)s or some other assets I have.”
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