Home sellers are getting ghosted — and not just because it’s Halloween. Across America’s housing market, buyers are vanishing faster than trick-or-treat candy.
This reality isn’t only scary for sellers, but for the housing market — and the economy — as a whole.
Around 15 percent of agreements were canceled in September, up from roughly 13.6 percent a year earlier, according to a report from Redfin.
To put that number into perspective, just over 53,000 home–purchase agreements nationwide were canceled.
There are several reasons for the rife cancelations, one of them being buyer’s remorse.
‘Buyers make an offer, then they start worrying they could have found a better deal or a better home because there are more home sellers than buyers in the market,’ said Jo Chavez, a Redfin Premier agent in Kansas City.
‘Some other buyers are backing out because they’re concerned about job security.’
Certain areas have been more affected than others — with Florida and Texas being hit particularly hard.
Home sellers are getting ghosted — and not just because it’s Halloween
Tampa had the country’s highest cancelation rate in September, with a staggering 20 percent of home-purchase agreements being called off
Jo Chavez, a Redfin Premier agent in Kansas City
Tampa had the country’s highest cancelation rate in September, with a staggering 20 percent of home-purchase agreements being called off — up 17.7 percent from the same time last year.
The Florida city has seen struggles across the board in recent months, with home values plummeting 3.3 percent year-on-year, according to August data.
Tampa is also officially a buyer’s market, which can be an early warning sign of a cooling market, or even a housing market crash, because it usually indicates other economic struggles.
In fact, much of the country is now in buyer’s market territory, which gives shoppers a huge advantage in the sales process.
Buyers have more options, and therefore more leverage to negotiate. With so many houses on the market, if they see a better option come along even after making a sales agreement, they could pull out.
In the current market, home prices and mortgage rates are high, so buyer’s want their house to be perfect — and because competition is low, they can afford to be picky.
Around 19 percent of deals were abandoned (up from 16.8 percent) in San Antonio, and Fort Worth, Dallas, Orlando, Fort Lauderdale, and Jacksonville also saw startling numbers of cancelations.
It’s no mystery why buyers are pulling out of deals in Florida.
Orlando was another city that saw lots of buyers pulling out of deals at the last minute
As rising climate risks combine with increasing HOA fees and insurance premiums, many potential buyers are choosing to wait.
‘I worked with one seller who received 78 repair requests from a buyer following the inspection, and that was after the seller had already agreed to lower their $375,000 asking price by $25,000 because the house needed some improvements,’ said Dawn Liedtke, a Redfin real estate agent in Tampa.
‘The buyer came back and said they would handle the cost of the repairs, but only if the seller was willing to lower the price by another $100,000. The deal didn’t work out.’
Sun Belt states are also leading the nation in new home construction, giving buyers confidence that other options will become available — and prompting some to back out of deals. Economic uncertainty is adding to the hesitation as well.
The deals are typically falling through during the inspection period, according to Redfin agents that say more than 70 percent of the deals crumble at this stage.
Areas seeing the least amount of cancelations are expensive cities, such as San Francisco, Seattle, New York, and Boston.
This is because these areas have less inventory and therefore more competition.
Living in these cities means that buyers are generally wealthier and won’t back out last minute due to affordability issues.
In Jacksonville, Florida, buyers are increasingly pulling out of home buying contracts as sellers refuse to give them the concessions they want
Dawn Liedtke, a Redfin real estate agent in Tampa, detailed extensive concessions that buyers are now demanding since they hold the upper hand in the housing market
Meanwhile in Southern and Sun Belt cities, people save for years to afford a home and might not have the financial stability to see the deal all the way through.
According to The Wall Street Journal, Trish DaCosta spent more than five years saving to purchase a home in Nashville, Tennessee.
She was elated when her bid for a three-bedroom house priced around $400,000 was accepted. But about a month before the scheduled closing earlier this year, DaCosta — who worked in public relations — was laid off.
Her first call after receiving the news was to her real-estate agent to withdraw the offer.
‘I’m grieving the loss of that house,’ said DaCosta, 40, in an interview with WSJ. ‘It’s really frustrating after years of saving and planning.’
A clause in her purchase agreement allowed her to recover her $4,000 earnest money deposit, though she forfeited roughly $1,100 paid for inspections and appraisal fees.