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Price Reductions are Still the Norm

Sellers Still Slashing Home Pricessinking_house

SELLERS FEEL THE HEAT AS THEY CONTINUE TO SLASH HOME PRICES THIS SUMMER

Down Economy and High Levels of Home Inventory Put Sellers at Disadvantage as Prices Continue to Drop

According to data compiled by Trulia, they announced that 24 percent of listings currently on the market in the United States as of July 1, 2010 experienced at least one price reduction. This represents a nine percent increase from the previous month. The total dollar amount slashed from home prices was $27.3 billion and the average discount for price-reduced homes continued to hold at 10 percent off of the original listing price.

Many of the largest U.S. cities saw significant increases in price reduction levels this month with 22 of the top 50 cities across the U.S. experiencing price reduction levels at 30 percent or more, compared to just 10 cities in the previous month. Minneapolis leads the way with 40 percent of its home listings experiencing at least one price cut. This is the third straight month that Minneapolis has held the top spot and no other city has reached the 40 percent mark since Trulia started tracking home price reductions in April 2009. With an average discount for price-reduced homes at nine percent, the city’s total dollar amount slashed from home prices was $30.1 million.

“Sellers are feeling the heat this summer as the economic recovery simmers down and home inventory levels climb,” says Pete Flint, co-founder and CEO of Trulia. “We’re seeing more and more sellers reduce their home listing prices to attract potential buyers, who definitely have the upper hand in negotiations this season. The slow start to the summer season is a major concern that we are heading towards a double-dip in the second half of this year.”


Western U.S. Leads with Price Reduction Increases

In the first half of 2010, cities in the Western U.S. were experiencing a decrease in reductions.  This month, the same cities experienced some of the largest surges in price reductions compared to the previous month.  Oakland increased 38 percent month-over-month and San Diego saw reductions increase by 25 percent. Additionally, Honolulu experienced a 21 percent increase from the previous month and Las Vegas increased by 20 percent. Texas cities also saw significant increases in price reductions with San Antonio and El Paso increasing by price 21 percent and 20 percent respectively. The following U.S. cities experienced the biggest increases in price reductions from June 1, 2010 to July 1, 2010:

City State June 2010 July 2010 Percentage Change
Oakland CA 13% 18% 38%
San Diego CA 16% 20% 25%
Omaha NE 25% 31% 24%
Virginia Beach VA 26% 32% 23%
Honolulu HI 19% 23% 21%
San Antonio TX 19% 23% 21%
El Paso TX 15% 18% 20%
Las Vegas NV 10% 12% 20%

Luxury Market Still Feeling The Pain

Price reduction levels for luxury homes (those listed at $2 million and above) continue to provide large discounts with an average of 14 percent off of the original listing price. The average discount for homes priced less than $2 million remains at 9 percent.

The chart above confirms that the Luxury and Resort areas are still reducing prices!

For help finding a Resort, Golf, or Luxury home call Kathy Schowe at The Lori Bowers Group in La Quinta, CA!

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