September 16, 2009
Trulia, Inc. announced that 26% of homes currently on the market in the United States as of September 1, 2009 have experienced at least one price cut. Price reduction levels have increased for the fourth straight month and have seen a 10% overall increase compared to June of this year. During the summer months of June to September, the total amount slashed from home prices has increased by more than $1.1 billion from $27.4 billion to $28.5 billion. The average discount for price-reduced homes remains at ten percent off of the original listing price.
Jacksonville experienced the highest level of price reductions for the fourth straight month with 37% of current listings seeing at least one round of discounts. Additionally, several cities continue to experience high levels of price reductions with Albuquerque, Indianapolis, Milwaukee Minneapolis, Portland and Raleigh all earning spots in the top ten for the second straight month.
The steady rise in price reductions is a signal that sellers are still trying to adjust to the ever changing market conditions,” said Pete Flint, Trulia co-founder and CEO. “We expect the $8,000 federal tax incentive to extend the peak home purchasing season beyond the summer months, continuing to drive competition amongst sellers and ultimately leading to more price reductions, giving consumers a great opportunity to find the home of their dreams.”
Several cities have seen four consecutive months where the percent of homes that have seen a price reduction has increased month-over-month, underscoring that sellers across the country might not be fully adjusting their home value expectations to the current real estate market.
Luxury Market Getting Hit Hard
Luxury homes (those listed at two million dollars and above) continue to bear the brunt of discounts being offered with an average of 14% being slashed from the original asking price compared to the national average of 10%. Additionally, luxury homes represent barely 2% of all current listings on Trulia, but are responsible for 25% of the $28.5 billion in home price reductions.