Attention Sellers:  It's no longer 2021!!!

If you've been keeping an eye on the real estate market recently, you may have noticed a curious trend: more and more homes are being delisted in Palm Springs as well as other real estate markets across the country. For those not familiar with the term, The Paul Kaplan Group explains that a delisted home is one that was previously on the market but has been taken off without being sold. Our real estate consultants are saying that this trend is raising eyebrows, especially in markets like Palm Springs where homes were flying off the shelves just a year or two ago. So, what’s going on? Here’s what no one is telling you.

1. Sellers’ Expectations Are Still Stuck in 2021

One of the main reasons for the growing number of delisted homes is that many sellers are clinging to the prices their neighbors achieved during the real estate boom of 2020-2021. Back then, low interest rates and a surge in demand led to bidding wars and skyrocketing home prices. But the market has shifted. Buyers are more cautious, and many sellers aren’t adjusting their expectations to match the current reality. When homes are priced too high and sit on the market for too long, sellers may opt to delist rather than lower their asking price, hoping for a market rebound later.

2. Interest Rates Are Taking a Toll

Mortgage rates have risen sharply in recent months, putting a damper on buyers’ purchasing power. What a buyer could afford at a 3% interest rate is vastly different than what they can afford at a 6% or 7% rate. This is causing many would-be buyers to either delay their home purchase or look for homes at lower price points, shrinking the buyer pool for higher-priced homes. Sellers who aren't willing to negotiate or come down in price are finding it hard to attract offers, leading to more homes being pulled from the market.

3. Inflation and Economic Uncertainty

Economic uncertainty is another major factor. With inflation still impacting everything from groceries to energy bills, potential buyers are more cautious than ever before about making a large financial commitment like purchasing a home. Some sellers, faced with a lack of serious offers, are choosing to delist and wait for more stable economic conditions before trying again.

4. Seasonal Shifts in the Market

The real estate market always experiences seasonal fluctuations, and many homes are typically delisted in the fall and winter months. Sellers may remove their homes from the market with the intention of relisting in the spring when there’s traditionally more buyer activity. This normal seasonality is playing a role, but in 2023, the delistings are happening earlier and more frequently, signaling that something deeper is at play.

5. Homeowners' Hesitancy to Sell

Many homeowners who purchased or refinanced their homes during the low-interest-rate boom of the past few years are hesitant to sell. These homeowners are "rate locked" into ultra-low mortgage rates, and they’re reluctant to sell their homes and potentially have to buy a new one at today's much higher rates. Even those who might want to upgrade or downsize are holding off, resulting in fewer listings and more delistings as homeowners decide it’s not the right time to make a move.

6. Buyers Are Getting Picky

During the height of the real estate frenzy, buyers were willing to make compromises just to get their foot in the door. Now, with less competition and higher borrowing costs, buyers are becoming more selective. They want homes that are move-in ready or priced attractively enough to justify potential renovation costs. Homes that need work or are overpriced are more likely to languish on the market and eventually get delisted.

7. Fear of a Housing Crash

Although most experts agree that a crash like 2008 is unlikely, fear and uncertainty are powerful motivators. Some sellers are pulling their homes from the market out of concern that prices could drop further. Rather than risk having to sell at a lower price later, they’re waiting on the sidelines to see where the market goes.

Conclusion: What Should You Do?

If you’re a seller considering delisting your home, it’s crucial to have a clear strategy. Work with your real estate agent to evaluate whether your home is priced correctly for the current market. Be willing to make adjustments, either in price or in how you present your home, to attract today’s more cautious buyers.

For buyers, now is actually a great time to take advantage of less competition. With fewer buyers in the market and more homes being delisted, you may have more room to negotiate and find a property that suits your needs.

The real estate market is always shifting, and while the current wave of delistings might seem concerning, it’s all part of the natural ebb and flow. Staying informed and working with an experienced agent can help you navigate these changes successfully.

If you have any questions about buying or selling in today’s market, don’t hesitate to reach out to our real estate agents at the Paul Kaplan Group. We're here to help guide you through every step of the process, even in challenging times.