Sellers Cut Prices on 50% of Homes

Homeowners are slashing prices more drastically and more frequently, according to recently released data from ZipRealty. The average price reduction is now 7.1 percent of list price.

List prices dipped about $19,000 in August compared with July, across the 26 markets studied. On average, sellers made two price cuts during that time.

Seven cities saw price reductions on more than half of their inventory, with Jacksonville, Phoenix and Minneapolis on top with 55 percent, 54.4 percent and 52.4 percent, respectively.

"Earlier in the year we saw sellers being aggressive with their pricing, but not reducing as much," says Leslie Tyler, vice president of marketing for ZipRealty. "What we are seeing now is that the trends are reversing."

With the seeming desperation of home sellers, and the continued drop in mortgage rates, buyers are in a very good position. But the plunging rate at which buyers are applying for mortgages tells a different story, which might explain sellers' attitudes.
Fewer homes are sold near the end of the year, and with the homebuyer tax credits now gone, people who have to move due to a job or a divorce will more quickly lower their asking price, she says. However, buyers are also being more patient. "Knowing prices are going down, buyers are more willing to wait for the right house."

For buyers looking for the best deals: the deepest discounts, with more than a 10 percent price reduction from the list price, were all in Florida. Miami/Ft. Lauderdale dipped 12.32 percent, Orlando, 11.49 percent, and Jacksonville, 11.24 percent. Their median price reductions were $26,000, $20,000 and $19,000 respectively.

The next closest contender was Baltimore, with a 9.6 percent reduction in price that amounted to a median $19,000 dip. San Francisco, whose median list price fell the furthest of all, down $35,000, actually had the fewest number of reductions per listing, at 1.76 on average. No city cut their prices three times or more, but Chicago and Phoenix tied for first in the highest number of average reductions per listing: 2.43.

Texas sellers made the smallest price cuts, with a median price cut of only $10,000 in Houston and Dallas. The Raleigh-Durham, N.C. area was a close third with $10,100.

With mortgage rates at record lows, it's not a bad time to consider buying.

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