(This guest post originally appeared at the author’s blog)
Trulia, the listing search site, recently developed a Monthly Price Reduction report on the US housing market. Its intriguing because Trulia is able to aggregate this from a data set of millions of active listings – they have 80% coverage…plus the mapping presentation is amazing (way cool). (disclosure: I am on their industry advisory board)
Here’s the press release and some highlights:
- 22 per cent of homes currently on the market in the United States as of December 1, 2009 have experienced at least one price cut, the lowest level since Trulia started tracking price reductions in April, 2009.
- The total amount slashed from home prices also dropped from $28.1 billion in November to $24.7 billion in December, representing a 12 per cent decrease.
- The average discount for price-reduced homes slightly increased to 11 per cent off of the original listing price compared to 10 per cent in the previous four months.
- The number of listings on Trulia also decreased by 9 per cent from the previous month.
The trend over the past several months shows darker (higher price reductions) areas of inventory transitioning from September 2009 to December 2009. If its sensory overload, focus on Alaska to get my drift moving from the above chart down the post through the older charts. More discounting means that sellers are adapting to the new (lower) housing market. Less discounting in this market suggests that list prices are approaching market value when originally priced.
Other than a brief reprieve this month in discounting, which is likely due to the transition from the first time home buyers tax credit to the new program, listing prices are trending lower, perhaps “chasing” the market.
from the press release…
“We saw some of the highest levels of reductions last month, as home owners raced to sell their homes in advance of the November 30 expiration of the tax credit,” said Pete Flint. “We are now seeing fewer reductions at the low end of the market as those sellers are increasingly in sync with market prices. With the expansion of the tax credit to repeat home buyers and extension to April 30, we expect to see an increase in price reductions at the higher end of the market in the first quarter of 2010.”
For the first time since Trulia started tracking price reductions in April 2009, one major U.S. city has reached 40 per cent of listings with price reductions – Minneapolis. This is the second straight month that Minneapolis has held the top spot for highest percentage of price reductions.
Here’s an archive of prior month maps.