The current housing market continues to offer a good news/bad news scenario. First the good news: prices continue to drop. Now for the bad news: sellers are dropping their prices. Well, the bad news for the seller is good news for the buyer who may discover that the home that they are interested in has already seen at least one price reduction, strengthening their position as a buyer.
Falling Prices After The Initial Listing
According to Trulia.com, which tracks the US real estate market, nearly one in four homes currently on the market has already gone through one round of price reductions. This is taking place even as sellers are pricing their homes at rates much lower than a year ago. Finding that their homes are not selling at the original asking price, 23.6% of homeowners have lowered their home prices at least once. Trulia’s data excludes foreclosed homes.
“Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season,” said Pete Flint, Trulia co-founder and CEO. “Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.”
A number of major markets are seeing home prices reduced by their owners at a much greater rate than the national average. For example, Jacksonville, FL homeowners are leading the way with some 36% of the homes having gone through one or more price drop. Tucson, Boston, Los Angeles, Columbus, Dallas and Honolulu are among the markets where homeowners are more apt to drop their prices than average.
Taking Tens Of Thousands Off Of The Initial Price
More telling is just how much homeowners are willing to drop off of their selling price. Trulia says that this average is 10.6% which means that a home originally listed for $229,000 may have already been reduced to about $205,000.
Detroit homeowners are dropping the price on their homes by the largest amount, averaging 23%. This means that a Detroit home listed originally for $159,000 may have been reduced to around $127,000. Trulia noted that those markets with a greater number of foreclosures are forcing home prices down at the greatest rate.
Few experts are willing to concede that the national market has bottomed out yet. However, prices in some local markets appear to be stabilizing, even rising where demand exceeds available supply.
Source: Trulia, Inc.
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