After years of steadily increasing values, home price reductions are on the rise. In fact, the share of U.S. homes listed for sale with at least one price cut is at its highest level since 2014—“more evidence of a market that may finally be tilting in homebuyers’ favor,” states a new report by Trulia.
According to Trulia, price reduction was largely unchanged this year until July and August, climbing to 17 percent from one month to the next. That was the highest national rate for reductions since August 2014. Compared to August 2017 this August saw its share of listings with a price cut rise in 63 of the 100 largest metros.
“Coupled with home price growth that has begun to slow, and inventory levels that are creeping back up in some places, a higher rate of price cuts could be a critical third confirmation that things may finally be shifting in buyers’ favor,” the report stated.
According to the report, the 12 months ending August 2018 saw a median nationwide reduction of 2.6 percent off listing prices.
Pricier neighborhoods saw listing prices drop more often than less expensive neighborhoods, Trulia reported. This was especially prevalent in Camden, New Jersey, and Raleigh.
“Raleigh’s more expensive Glenwood and Five Points neighborhoods, where median home values are currently $676,500 and $519,400, respectively (compared to a metro-wide median of $258,692), have seen 18.9 percent and 16.7 percent of their listings go through at least one price cut over the past year,” the report stated. “Meanwhile, in the less expensive neighborhoods of South Raleigh and Southeast Raleigh, only 5.8 percent and 6.7 percent of listings have had a price cut in the past 12 months.”
Camden saw similar numbers. According to Trulia, 21.5 percent of listings in Springdale, the city’s most expensive neighborhood, had a price cut in the year ended in August; meanwhile, in Bergen Square, among the city’s least expensive areas, just 8.6 percent of listings had a price cut over the same time.
The caveat: “The growing prevalence of price reductions is likely to be welcomed by home shoppers, but the news could be tempered somewhat by the fact the median price reduction itself is getting smaller,” the report stated.
Across the 12 months ending August 2018, the median reduction nationwide knocked 2.6 percent off the listing price, the report stated. During the same period in 2011-2012, the median reduction was 4 percent.
The median percent decrease of a price reduction today, the report concluded, is less than the median price reduction at the outset of the recovery in 97 of the 100 largest metros Trulia analyzed.