Dennis Norman
Average price cut for homes drops to 11 percent off original price…discount increases to 15 percent off original price for homes priced above $2,000,000.
According to a report released by Trulia.com, 21 percent of the homes for sale as of January 1, 2010 have experienced at least one price cut. This makes the second consecutive month that price reduction levels have decreased and the lowest level since Trulia started tracking price reductions in April 2009.
The average discount for price-reduced homes continues to hold at 11 percent off of the original listing price. This was also the second straight month where inventory levels have dropped for single family homes and condos across the United States.
South Continues With Least Amount of Homes Reduced
The South has the lowest overall level of price reductions, with 20 percent of current listings experiencing at least one price cut, while the Northeast saw the biggest decrease in price reductions compared to the previous month — 12 percent. (Regions according to the U.S. Census Bureau)
- South – 20% of listings with price reductions
- West – 22% of listings with price reductions
- Midwest – 22% of listings with price reductions
- Northeast – 22% of listings with price reductions
“Consumers have a golden window of opportunity to find a great home and take advantage of the tax credit before mortgage rates start to rise,” said Pete Flint, Trulia co-founder and CEO. “Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for home buyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase price ceiling.”
The number of major U.S. cities with price reduction levels at 30 percent was cut by 50 percent in January. In December, 14 major cities saw a reduction of 30 percent or greater and that number has been reduced to just seven cities in January. Additionally, Minneapolis, which has the held the top spot for the past two months, experienced a 33 percent decrease compared to the previous month. Cities experiencing the largest decreases in percentage of listings with price reductions compared to the previous month include:
- Los Angeles, CA – 46% decrease in price reductions
- New York, NY – 36% decrease in price reductions
- Memphis, TN – 34% decrease in price reductions
- Minneapolis, MN – 33% decrease in price reductions
- Honolulu, HI – 33% decrease in price reductions
Luxury Market Still Hardest Hit
Luxury homes (those listed at $2 million and above) continue to be hit the hardest by price reductions with the average discount rising to 15 percent for the first time since Trulia started tracking in April 2009.
Additionally, luxury homes represent less than two percent of all current listings on Trulia, but are responsible for 24 percent of the $21.2 billion in home price reductions. The average discount for homes priced less than $2 million continues to hold at 10 percent.
Related posts:
- One in Four Sellers Have Reduced Their Prices
- Twenty-three percent increase in price reductions by home sellers
- Signs of Stabilization in U.S. Real Estate Market — Home Price Reduction Levels Drop 26 Percent
- Fourth consecutive month that over 25 percent of homes for sale have had price cut
- Sellers reduce home prices as they struggle to compete with distressed home sales
[...] Home price reductions by sellers drop for second consecutive month [...]