Home Price Cuts at Highest Level Since 2014

Trulia, San Francisco, said the share of U.S. homes listed for sale with at least one price reduction reached its highest level since 2014.

Trulia Economist Felipe Chacon said the scope of reductions provides more evidence of a market that “may finally be tilting in homebuyers’ favor.” But he noted not all would-be home buyers are likely to benefit equally.

The Trulia report noted for much of the first half of 2018 the share of listings with a price cut was largely unchanged from 2017, before shooting up in July and August. “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,” Chacon said.

Other report findings:

–On a month-to-month basis, after a steady start to the beginning of the year, the percent of listings nationwide with at least one price reduction climbed to 17.2 percent in August, the highest national rate since August 2014.

–Year over year, the share of listings with a price cut rose in 63 of the 100 largest metros.

–In 79 of the 100 largest metros, there is a strong correlation between how expensive a neighborhood is and the proportion of listings with at least one price cut over the past year: Hopes in pricier neighborhoods have listing prices slashed more often than those listed in neighborhoods where homes are less expensive. Budget-conscious buyers in more-affordable neighborhoods may have a harder time finding a bargain.

–The typical price reduction has gotten smaller since the early years of the recovery. Across the 12 months ending August, the median reduction nationwide knocked 2.6 percent off the listing price–during the same period in 2011-2012, the median reduction was 4 percent.

The report can be found at https://www.trulia.com/research/price-cuts-analysis-aug2018/.