Some Markets See Home Price Cuts
So much for home bidding wars.
Zillow Inc., Seattle, reported more price cuts now than a year ago in more than two-thirds of the nation’s largest metros, with West Coast markets reporting the greatest increase.
Zillow said nearly 14 percent of all listings across the U.S. saw a price cut in June, up from a recent low of 11.7 percent near the end of 2016. In San Diego, 20 percent of listings had a price cut in June, up from 12 percent a year ago.
The analysis said home value growth is slowing in nearly half of the 35 largest U.S. metros, with Sacramento and Seattle reporting the greatest slowdown since the beginning of the year. Portland and Riverside, Calif., also reported increases in home price cuts. U.S. home values rose 8.3 percent over the past year, by Zillow’s estimate, to $217,300; it expects home value growth to slow to a 6.6 percent appreciation rate by this time next year.
Since the beginning of the year, the share of listings with a price cut increased 1.2 percentage points, the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year.
The analysis noted the share of higher-priced listings with a price cut rose 0.9 percentage points since the beginning of the year, to 16.2 percent, while the share of lower-priced listings with a price cut fell 0.1 percentage points, to 11.2 percent. Higher-priced listings have seen a disproportionately large increase in price cuts in 23 of the 35 largest metros since the beginning of the year.
“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly,” said Zillow senior economist Aaron Terrazas. “A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years. It’s far too soon to call this a buyer’s market, home values are still expected to appreciate at double their historic rate over the next 12 months, but the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”
Zillow reported fewer listings with a price cut in some of the nation’s more affordable housing markets. San Antonio, Phoenix, Philadelphia and Houston reported fewer listings with a price cut in June than a year ago. In San Antonio, where the median home value is $185,000, 17.8 percent of all listings had a price cut in June, down from about 20 percent of listings a year ago.
