Frustrated homeowners are taking their homes off the market at a record pace, as prices decline and sales stall – and more worry about losing money.
About one of every 14 homes (6.6%) listed on the market in California were delisted in September compared to a year ago, the highest rate in a decade and a full percentage point more than the national average, according to Redfin. The company considers a home “delisted” if it goes off the market without entering escrow or selling within 30 days.
“That increase is bigger than it looks on paper; it represents a fairly significant jump in delistings from last year,” said Asad Khan, a senior economist for Redfin.
Indeed, a small number with a significant impact. Fewer homes on the market greatly affects the market, with more competition for listings and props up prices. Fewer than one of every five homes “delisted” goes back on the market within a few months.
“The frequency of delistings is keeping inventory tighter than it looks on paper,” Khan said. “Many homes have a sticker price higher than buyers are willing to pay, but many sellers are unwilling to negotiate. When tens of thousands of homeowners (nationwide) pull their homes off the market rather than accept a low offer, it effectively reduces the supply of homes that are available for buyers. That keeps sale prices elevated.”
The number of homes available to buy declined for the sixth straight month in October, according to the California Association of Realtors. The state’s median-home price – meaning half the homes sold for more, the other half for less – was $887,000 in October, barely budging from a year ago.
BIG JUMP IN DELISTINGS FROM A YEAR AGO
Delistings have jumped 40% compared to a year ago in California, based on a compilation of data from the Bay Area and the Sacramento region to San Diego, compared to the lower national average of 28% (see table, below).
San Jose – one of the faster-selling markets in California – had the largest increase in delistings in the state at 53.3% compared to a year ago, and the third-highest percentage of homes on the market removed overall.
Many homeowners who are pulling signs from their front yards are concerned about slow-as-molasses sales, while others worry of losing money.
About three of every five (61%) of homes listed are considered “stale” in California, defined as failing to enter escrow or selling withing two months. California is a bit better than the national average of 70% of “stale” listings.
But for many homeowners who experienced bidding wars and multiple offers just a few years ago, the current market is a hard-to-accept reality.
“More sellers are giving up because their homes have been sitting on the market for a long time, and they don’t want to or can’t afford to settle on accepting a low price,” Khan said.
MANY HOMEOWNERS ‘STILL EXPECT SKY-HIGH PRICES’
Nationwide, almost half (47%) of homes delisted were bought within the past five years, creating a huge financial risk for homeowners who could be forced to sell at a loss. They also would likely have a higher mortgage rate compared to the 2%-3% interest of just a few years ago.
For others, delisting is simply about dreaming of days gone by rather than the reality of today.
“Many homeowners who bought during the pandemic demand frenzy still expect sky-high prices,” Khan said. “They remember a seller’s market, so they’re hesitant to yield to buyers who want to negotiate the price down and/or ask for concessions. Longtime owners, though, are more motivated to sell — they’re often downsizing or relocating for retirement.”
CALIFORNIA CITIES HAVE FOUR OF THE FIVE LARGEST PRICE DROPS IN U.S.
Homeowners who need – or want — to sell are more willing to work with buyers, according to Zillow. The average listing had a price drop of $25,000 in October.
California had four of the five markets with the largest price cuts in October, including $70,900 in San Jose and $61,000 in Los Angeles (see list).
It’s a dance that keeps moving between buyers and sellers. And the music will likely continue into at least the first half of 2026, as the economy and job market struggle.
“Recent buyers are also more likely to be testing the market; maybe they would sell and move up to a bigger home in a more desirable neighborhood if they get the price they want, but otherwise they’d stay put,” Khan said.
Plus, affordability is a big challenge for many buyers. Fewer than one of every five California households could afford to buy during the third quarter, based on a 20% down payment, according to the California Association of Realtors.
“With borrowing costs still elevated and inventory rebuilding uneven across the country, the housing market is settling into a period of slower, more fragmented price growth heading into year-end,” said Anthony Smith, senior economist with Realtor.com.
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Price cuts in October
Four of five largest price drops in the nation were in California
- San Jose: $70,900
- Los Angeles: $61,000
- San Francisco: $59,000
- San Diego: $50,000
Source: Zillow
Delistings soar to a record in October
| City | % increase of delistings from a year ago | % of delistings of overall listings | % of homes listed for 60 days or more |
|---|---|---|---|
| Anaheim | 32.7% | 5.2% | 66.4% |
| Los Angeles | 48.3% | 7.2% | 70.2% |
| Oakland | 42.0% | 7.3% | 55.4% |
| Riverside | 45.4% | 6.3% | 72.5% |
| Sacramento | 33.9% | 6.8% | 66.0% |
| San Diego | 42.1% | 6.7% | 63.9% |
| San Francisco | 22.0% | 6.2% | 45.9% |
| San Jose | 53.3% | 6.9% | 44.2% |
Source: Redfin
