CHANGES IN HOME VALUE GROWTH
Price Cuts Becoming More Common as Home Value Growth Slows
- Areas such as San Diego have had as many as 20% of the listings reduce their price. This is 8% more than last year.
- In almost half of the 35 largest U.S. metropolitan areas, home price value is slowing down, with Sacramento and Seattle reporting the most significant slowdown since the beginning of the year.
- Home price value in the U.S. is still increasing. Home values rose 8.3 percent over the past year, but experts predict if current trends continue that could slow to 6.6 percent this year.
Sellers of less-expensive homes seem somewhat less willing to consider a price cut, even as the share of pricier homes available for sale at a discount from their original list price is growing.
If recent trends continue, price cuts could be increasingly more common in coming months. Year to date the share of listings nationwide with a price cut increased 1.2 percentage points; this is the greatest January-to-June increase ever reported, and more than double the same period last year.
Percentage of listings with a price cut in June (Select Markets)
- San Diego, 20 percent
- Seattle, 12 percent
- Portland, Sacramento, Calif. and Riverside, Calif., were also among the markets that experienced an increase in the share of listings with a price cut in June compared to a year ago.
It is far too early to say that these figures indicate that the market, in general, has shifted from a seller’s market to a buyer’s market. Prices for lower-priced homes had more increases than cuts, for example. What can be gleaned from all of this is that it may be the beginning of a shift in the market and it should be watched more closely in the coming months.