Delistings Spike Signals Market Frustration
A striking trend has emerged in the US housing market as property delistings surged by 47% in May compared to the previous year. This dramatic increase reflects a growing frustration among sellers who are opting to pull their homes off the market rather than lower their asking prices. Data from Realtor.com highlights that for every 100 new listings, 13 homes were delisted in May, a significant jump from 10 in the spring of last year and just 6 in 2023.
Phoenix, Arizona, stands out as the epicenter of this trend, recording the highest delisting rate in the country. In May, the city saw 30 homes pulled from the market for every new listing, more than double the national average. This sharp rise indicates a deepening disconnect between seller expectations and buyer willingness to pay in certain hot markets.
Inventory Growth and Seller Strategies
Despite the wave of delistings, the overall inventory of homes for sale continues to grow, up for 20 consecutive months according to recent housing data. Active listings have increased by 28% year-over-year, providing buyers with more options but also contributing to longer selling times. Homes are now taking an average of 5 days longer to sell compared to last year, prompting some sellers to resort to price cuts, which have risen to 20.6% of listings.
However, many sellers are choosing to delist rather than reduce prices, a strategy bolstered by record-high levels of home equity. Unlike past housing downturns where falling prices forced sales, today's homeowners often have the financial cushion to wait out the market. This 'I'll wait' mentality is reshaping market dynamics, particularly in cities like Phoenix where oversupply and buyer scarcity are becoming more pronounced.
Regional Impacts and Future Outlook
The delisting trend is not uniform across the country, with certain regions feeling the pinch more acutely. Phoenix's struggles are compounded by a staggering inventory increase, with listings up 467% from pandemic lows three years ago, reaching the highest level in a decade. Posts found on X suggest a sense of panic among sellers in the area, with some observers noting a potential for price declines in the latter half of 2025.
Looking ahead, experts are watching whether this surge in delistings will lead to a broader correction in home prices. While builders continue to add supply with incentives like low teaser rates, buyer demand remains tepid, creating a standoff that could further stall transactions. As sellers hold firm and buyers remain selective, the US housing market appears poised for continued turbulence in the months ahead.