Increased Price Reductions Could Give Buyers More Room to Negotiate This Spring

Core Insights - The housing market is showing signs of adjustment, with an increase in homes experiencing price reductions, rising to 16.8% from 14.6% year-over-year [1][7] - Newly listed homes have increased by 4.2% compared to last year, marking the highest February activity since 2021 [1][2] - The median home listing price has decreased to $412,000, reflecting a year-over-year decline [2][7] Market Trends - Sellers are becoming more active in the market, with a notable increase in new listings, while the market is moving towards a more balanced state with rising inventory [2][8] - The average time homes spend on the market has increased for the 11th consecutive month, averaging 66 days, which is still faster than pre-pandemic levels [6][7] - The South and Midwest regions have seen the most significant increases in time on the market, averaging an additional seven and eight days, respectively [6] Regional Insights - In the Washington, D.C. area, price reductions have increased by 2.3 percentage points compared to last February, aligning with national trends [5] - The median list price per square foot in Washington, D.C. has also declined year-over-year, indicating a broader market adjustment [5] Employment Impact - There is currently no clear connection between federal employment changes and housing market trends, although potential future impacts are acknowledged [3][4] - The health of local housing markets is often linked to the local labor market, and the effects of federal workforce reductions may depend on the private sector's ability to create new job opportunities [3]