The latest report from Redfin indicates a significant decline in home sales in May 2024, marking one of the lowest levels in nearly a decade. The annualized rate of home sales, adjusted for seasonal variations, dropped to just below 408,000, which is 1.7% lower than the previous month and 2.9% below the levels seen a year ago.

This downturn contrasts sharply with the seller-friendly market conditions, as evidenced by a record high median sale price of $439,716, reflecting a 5.1% increase year-over-year. The scarcity of listings, approximately 25% lower than pre-pandemic levels, continues to drive prices up.

However, there is a silver lining for buyers as one in five listings in May included a price cut, amounting to 19.2% of all listings. This is an increase from 13.2% in May 2023 and near the record high of 21.7% seen in October 2022. Metro areas like Indianapolis, Tampa, and Denver saw more than 40% of listings with price cuts, while Newark, Lake County, and Milwaukee had fewer than one in six listings reduced.

The report attributes these price reductions to initial overpricing by some sellers, exacerbated by rising housing supply in areas like Florida and Texas where competition from homebuilders is strong.

Among the largest U.S. metros, Anaheim, California, topped the list with a remarkable 17.6% increase in median sale prices over the past year, followed by Cleveland (+15.1%) and Nassau County, New York (+14.2%).

This data underscores the complex dynamics of the current real estate market, characterized by high prices driven by low inventory, yet with pockets of price cuts indicating localized market adjustments.