We released our August price reduction report today which shows that 25% of U.S. homes as of August 1, 2009 have experienced at least 1 price cut of their original asking price. In the last 3 months, the percentage of price reductions has continued to increase. The total amount slashed off of active for sale listings by home sellers is $27.8 billion. 66% of the top 50 metros have price reduction levels higher than the national average. Today, the average percent off the original asking price is approximately 10% off compared to 10.6% in June. For the 3rd straight month, Jacksonville, Florida leads the way with 38% of active listings seeing a price reduction.
Price Reduction Highlights
- 25% of U.S. homes as of August 1, 2009 have experienced at least 1 price cut of their original asking price
- $27.8 Billion in price reductions
- Average national price reduction is 10% compared to 10.6 in June
- Jacksonville, Florida leads nation in price reductions for 3rd straight month with 38%
- Sellers need to price aggressively to avoid price reductions
- Luxury homes priced $2 million plus seeing an average of 14% cut vs. the national average of 10%
- Luxury homes over $2,000,000 on Trulia = 2% but = 25% of the $27.8 billion in home price reductions
- Boston, Milwaukee & Minneapolis in top five w/ highest % of reductions for the 2nd straight month
- 66% of the top 50 metros have price reduction levels higher than the national average
- New York City, New York = sellers cut 13% off original asking price
- Austin, Texas = sellers cut 8% off original asking price
According to Trulia’s Co-Founder & CEO Pete Flint,
“We are excited to see industry reports showing positive signs in the real estate industry, but there is still a long way to go before we’ll see a real recovery for the U.S. as a whole. Even as the volume of sales are starting to rise nationally, the median home price continues to fall.” “The reality is, today’s sellers need to price aggressively to avoid reductions. Consumers are looking for value and when they find a good deal, they are taking advantage of market conditions.”
Cities experiencing significant increases in percentage of listings with price reductions from June 2009 to August 2009 include:
• Fresno, CA – 67% increase in price reductions
• Colorado Springs, CO – 27% increase in price reductions
• Kansas City, MO – 25% increase in price reductions
• Oklahoma City, OK – 24% increase in price reductions
• Albuquerque, NM – 22% increase in price reductions
Cities showing signs of recovery with significant declines in percentage of listing with price reduction from June 2009 to August 2009 include:
• Dallas, TX – 42% fewer price reductions
• Las Vegas, NV – 33% fewer price reductions
• Louisville, KY – 33% fewer price reductions
• Los Angeles, CA – 19% fewer price reductions
• Washington D.C. – 17% fewer price reductions
Top 50 U.S. Cities for Price Reductions in August
Luxury Real Estate Market
Luxury homes that are priced $2 million and above are seeing an average of 14% cut vs. the national average of 10%. Approximately 2% of the homes on Trulia are luxury homes yet are responsible for 25% of the $27.8 billion in home price reductions.
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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August 14th, 2009 at 2:59 pm
Thanks for the great information, as always.
Pete’s absolutely right that pricing your home competitively from the get-go is critical (I just blogged about that very subject).
If you’re working with a real estate agent to sell your home, he should tell you what the market value of your home is, so that you can set a competitive price right from the beginning.
Consider pricing your home no higher than the middle of the range for homes comparable to yours. And if you need to sell your home quickly, you should consider pricing your home among in the bottom 25% of comparable homes.
. . .But don’t be afraid to reduce the price
If you’re still not getting any nibbles of interest, you should consider reducing the price.
And you should do it quickly. 90 days on the market is about average in Phoenix right now, so give it at least 30 days before you make a price reduction. But don’t delay beyond that. Homes that languish on the market for much longer than average often are forced to make one price reduction after another, as buyers and real estate agents may begin to question why the home has been on the market for so long.
August 18th, 2009 at 10:08 am
Rudy - you have some great information and I truly concur with the first commenter. I do want to add, that I still experience sellers having pricing dreams for their homes. Real estate agents must take the initiative to walk away when sellers still insist to list at a much higher price far exceeding comparables.