More Than 40% of Home Sellers Are Dropping Their Prices in Salt Lake City, Boise, Sacramento and Other Pandemic Hot Spots

(NASDAQ: RDFN) — Price drops have become increasingly common throughout the U.S., particularly in parts of Utah and other mid-sized metros in the West, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Many of the metros with the biggest share of price drops in May had outsized price growth during the pandemic because they were hotspots for people moving in from other parts of the country.

“There are two kinds of sellers in today’s market: Those who already know the market has cooled, and those who are learning about the cooling market as they go through the selling process,” said Redfin Chief Economist Daryl Fairweather. “The former wants to sell quickly before the market slows further and they’re willing to price slightly below comparable homes in their neighborhood right away, and the latter may have to drop their price if their home doesn’t attract buyers within a few weeks. As more sellers come to terms with the slowing market, fewer homes will have price drops.”

Nearly half (47.8%) of homes for sale in Provo, UT—located about 45 miles away from Salt Lake City—had a price drop in May, the highest share of the 108 metropolitan divisions in this analysis. Tacoma, WA, had about the same share of price cuts, at 47.7%. Next come Denver (46.9%), Salt Lake City (45.8%) and Sacramento (44.3%). Boise, ID (44.2%), Ogden, UT (42.6%), Portland, OR (42%), Indianapolis, IN (41.9%) and Philadelphia (41.2%) round out the top 10.

Provo, Boise, Salt Lake City, Sacramento and Ogden were also the top five metros with the biggest increase in the share of listings with price drops from a year earlier. Roughly 12% of listings in Provo and Boise had a price drop in May 2021, and it was around 20% in Salt Lake City, Sacramento and Ogden.

All in all, about half of the metros in this analysis saw more than 25% of home sellers drop their asking price in May. More than 10% of home sellers dropped their price in all 108 metros, driving the national share of price drops to a record high.

The uptick in price drops is symbolic of the slowdown in the housing market. Many buyers are backing off amid skyrocketing home prices, surging mortgage rates, high inflation and a faltering stock market.

Sellers are adjusting expectations in Salt Lake City, Boise

Four of the 10 metros with the highest share of price drops—Provo, Salt Lake City, Boise and Ogden—are among the 10 places where prices increased most during the pandemic. Prices shot up 65.7% to $550,000 from May 2020 to May 2022 in Provo. They rose 56.2% to $556,000 in Salt Lake City, 66.7% in Boise to $550,000 and 57.2% to $500,000 in Ogden.