For the First Time in a Year, Fewer Sellers Slash Asking Prices

April 21, 2010 | 5 Comments

How times change. Trulia.com is reporting this month that nationally fewer sellers cut their listing price on their homes and in some markets that’s even resulting in bidding wars on lower-end properties, according to Trulia’s March 2010 Price Reduction Report.

Trulia.com stated that we are now at the lowest percentage of price reductions in the last year for homes that have been reduced. Just under 20 percent of homes that were for sale as of March 1st had been reduced at least once. However in the fall months of October and November, up to 26 percent of sellers slashed their asking price. The current figure is the lowest since the company started tracking these price reductions in April 2009.

“The total dollar amount slashed from home prices dropped to $21.6 billion and the average discount for price-reduced homes continues to hold at 11 percent off of the original listing price,” states Trulia.com on its website.

The biggest declines in U.S. price reductions during the past few months (Feb. 1 – Mar. 1, 2010) have been in Charlotte, NC; Colorado Springs, CO; Houston, TX; Raleigh, NC; Jacksonville, FL. The highest percentage of decline for these areas was in Charlotte (28 percent drop).

In a press statement, co-founder and CEO, Pete Flint, said, “Consumer engagement on Trulia remains at an all time high, but home sales have dropped nationally during the past few months because there has been a lower sense of urgency to ‘buy now’. As we get closer to the government incentives running out, we expect price reductions to increase as sellers begin to feel the pressure to lure buyers in, in advance of the tax credit expiration.”

Trulia.com notes that the price reduction levels peaked nationally toward the end of last year. That corresponded to the Federal Housing Tax Credit’s original deadline of November 2009 when price reduction levels reached a high of 26 percent for each of the months of September, October, and November. However, that credit has been extended and since then a noticeable decline in price reduction levels has occurred, resulting in only a 19 percent price reduction level for the month of March 2010.

For now, price reductions in some areas may have tapered off, but in other parts of the country—Arizona, Massachusetts, Washington, D.C., Hawaii, and Maryland—it seems buyers and sellers still don’t agree on what’s a fair price, according to Trulia.com.

The top five cities with price reductions and their corresponding total dollar reduction are: Milwaukee, WI ($17,247,300); Phoenix, AZ ($99,006,960); Mesa, AZ ($30,437,385); Memphis, TN ($24,090,936); and Baltimore, MD ($35,287,980).

The method used to acquire the statistics is based on all price-changed data from live listings on Trulia.com which are obtained from brokers, agents, third party aggregators, and Multiple Listing Services. The company tracked price reductions from March 1, 2009 to March 1, 2010. However, foreclosure properties are not included in this. The site states that, “The percentage of listings with price reductions includes any non-foreclosure property on Trulia.com that has experienced at least one price reduction since it was first posted on the site. The city level data is for listings within the city boundary, and not for metro areas.” Today’s Local Market Conditions Report.

Source: www.Trulia.com


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