Home sellers are cutting prices at a record pace, while more homebuyers are canceling deals, creating a rather choppy and often-complicated market in California – and nationwide.
Almost one of every five (18.6%) of homes on the market in the state had so-called “price improvements” in August, a record pace and the latest evidence that even with slightly lower mortgage rates, buyers have the upper hand.
It’s become a buyer’s market after home sellers holding the cards for several years.
About one of every four (23.5%) homes in the Sacramento region – Sacramento, Placer, El Dorado and Yolo counties – had prices cut in August, the largest percentage in California, according to Redfin. San Diego followed at 22.2%, with Riverside at 19.4% (see table, below).
PATIENCE AND REALITY
Now, it’s far from a sky-is-falling scenario – the percentage of home sellers cutting prices is only 2.2 percentage points more than a year ago – but the average price drop is 4.3%. Given the current median-home price, just under $900,000, that is a $40,000 cut.
Real money – and real pain for home sellers. However, as noted in previous stories, most home sellers are enjoying near-record paydays and nifty profits in California.
Few are enduring a loss from the transaction. Only home sellers who bought in the past couple years are the most likely to lose money.
Real estate experts are preaching patience – homes could take several weeks to enter escrow – and setting realistic expectations.
“While some home sellers have come to terms with the realities of today’s housing market, many are still hoping to cash in on the pandemic-era housing market, when high demand was pushing many sale prices way over asking,” said Redfin senior economist Asad Khan. “It’s also wise for sellers to be patient, understand that it may take a few weeks or even a few months to offload their home in today’s slower-than-usual market, and be open to making concessions.”
| City | % of listings with price cuts | Average price cut |
|---|---|---|
| Anaheim | 18.5% | 3.7% |
| Los Angeles | 16.9% | 4.4% |
| Oakland | 18.6% | 4.6% |
| Riverside | 19.4% | 3.8% |
| Sacramento | 23.5% | 3.6% |
| San Diego | 22.2% | 3.8% |
| San Francisco | 12.2% | 5.8% |
| San Jose | 17.4% | 5.0% |
Source: Redfin
MORE BUYERS WALK
Khan encourages home sellers to “consult a local agent to set a realistic price from the beginning,” because a single price cut could lead to even more reductions down the road.
Buyers, many who are barely able to afford a home and have been waiting to gain the upper hand for several years, are in control. A record number of buyers are walking away from deals, for various reasons.
More than one of every eight (12.2%) deals fell through in August in California, compared to 11.0% a year ago, according to Redfin. Four of the eight markets surveyed in the report had 15%-plus deals tumble (see table, below).
| City | Canceled deals Aug. ’25 | Canceled deals Aug. ’24 |
|---|---|---|
| Anaheim | 13.6% | 14.9% |
| Los Angeles | 14.9% | 15.0% |
| Oakland | 9.0% | 5.0% |
| Riverside | 16.8% | 18.4% |
| Sacramento | 14.8% | 15.3% |
| San Diego | 15.6% | 14.5% |
| San Francisco | 5.9% | 3.6% |
| San Jose | 6.9% | 1.6% |
Source: Redfin
Seven of 10 (70%) failed deals were because of home inspection reports and/or pricey repairs were needed on the home. Buyer financing falling through or unable to sell their current home – these would be considered “contingent” deals – are the other leading reasons.
Nationwide, almost 56,000 deals for homes – or 15% — fell through in August, the most since 2017, when Redin started tracking canceled deals data.
You may also like …
