photo credit: woodleywonderworks
Today we announced that 21 percent of homes currently on the market in the United States as of February 1, 2010 have experienced at least one price cut. This represents the second straight month of home price reductions at this level, the lowest level since Trulia started tracking price reductions in April 2009, and a significant decrease since November 2009, when 26 percent of homes had at least one price reduction. The total dollar amount slashed from home prices dropped to $22.6 billion compared to $28.1 billion in November, a 19 percent decrease. The average discount for price-reduced homes continues to hold at 11 percent off of the original listing price.
California Seeing Less Reductions
Of the top 50 major U.S. cities*, only seven had price reduction levels at 30 percent or higher in February 2010, down from 21 in November 2009. Eight cities have seen a decline by more than one-third, and five of those cities are from the state of California: San Francisco, Oakland, Sacramento, San Jose, and San Diego.
“Seeing lower levels of price reductions nationally is an early indicator that we may be getting closer to a healthier real estate market. So far this year, we’ve seen more engagement by home buyers than we’ve ever seen before on Trulia and it shows no sign of slowing down,” said Pete Flint, Trulia co-founder and CEO. “However, the tax credit extension is scheduled to expire soon and last year’s experience indicates that sellers may begin to panic by reducing prices ahead of the deadline. We will be tracking this closely during the next few months to determine the overall health of the real estate market heading into the traditional summer buying season.”
The Tax Credit Effect
National price reduction levels peaked toward the end of last year, corresponding to the timing of the original November 2009 deadline for the Federal Housing Tax Credit. In the months following the extension of the tax credit we’ve seen the lowest levels of reductions since the report started in April 2009. National price reduction levels by month:
* February 2010 – 21%
* January 2010 – 21%
* December 2009 – 22%
* November 2009 – 26%
* October 2009 – 26%
* September 2009 – 26%
* August 2009 – 25%
* July 2009 – 25%
* June 2009 – 24%
Luxury Market Still Hardest Hit
Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with an average discount of 14 percent. Additionally, luxury homes represent less than two percent of all current listings on Trulia, but are responsible for 25 percent of the $22.6 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10 percent.
February 2010 Price Reductions – Top 50 U.S. Cities
For more info on Trulia’s national home price reduction report, please visit our press release in the Trulia News Room
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Tue, Mar 16, 2010
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