Are we shifting towards a buyer’s market?

by Steve Randall11 Oct 2018

The share of US home listings with a price cut rose to 17.2% in August, up from 16.7% a year earlier and the highest share since 2014.

An analysis from Trulia shows that 2018’s share of discounted listings started with little change from 2017 but has soared during July and August.

With slowing home prices and some areas showing improved inventory, Trulia says that we may be transitioning to a buyer’s market.

"Buyers should be encouraged by the signals we're seeing in the market," Trulia Housing Economist Felipe Chacon. "But not all buyers will benefit equally, and it pays to do research on your preferred neighborhood. Price reductions typically aren't uniformly spread out across a given city – some neighborhoods might have a lot of listings with a reduced price, others may have none. Our research shows that price cuts are much more prevalent in higher-cost neighborhoods, so budget-conscious buyers may have some trouble finding a bargain."

Price cuts in the top 100 metros

Of the top 100, the share of listings with price cuts was higher in August than a year earlier in 63.

The largest jump was in Las Vegas where the share was 12.6% in August 2017 and 20.8% a year later.

In San Jose, where the median home is worth more than $1.2 million and home values are growing more than 20% year-over-year, the share of listings with a price cut in August more than doubled compared to August 2017.

But the cuts are smaller

The downside to the increased share of price cuts is that the average discount has continued to trend lower since 2012 when the median reduction was 4.0%; in August 2018 it was 2.6%.

Metros With The Largest Swings in Price Cuts YoY

Rank

Geography

% of Listings
with at Least
One Price
Reduction In
the Month of
Aug

Percentage
Point
Change in
Reductions

Estimated Home
Values

Aug
2018

Aug
2017

2017-2018

Aug

2018

2017-
2018
Change

 

National

17.2%

16.7%

0.5

$216,700

6.5%

1

Las Vegas-Henderson-Paradise, NV

20.8%

12.6%

8.1

$273,094

15.3%

2

San Jose-Sunnyvale-Santa Clara, CA

15.5%

7.6%

7.9

$1,285,620

21.5%

3

Seattle-Bellevue-Everett, WA

20.0%

12.0%

7.9

$567,612

8.3%

4

Anaheim-Santa Ana-Irvine, CA

21.6%

15.8%

5.7

$726,727

5.4%

5

San Diego-Carlsbad, CA

26.4%

21.0%

5.4

$592,325

6.1%

6

Riverside-San Bernardino-Ontario, CA

18.8%

13.6%

5.2

$364,313

7.3%

7

Los Angeles-Long Beach-Glendale, CA

16.5%

12.1%

4.4

$612,809

6.3%

8

Sacramento--Roseville--Arden-Arcade, CA

22.0%

17.7%

4.3

$404,082

5.2%

9

Tacoma-Lakewood, WA

19.9%

15.8%

4.1

$336,529

10.8%

10

Oakland-Hayward-Berkeley, CA

13.6%

9.5%

4.1

$766,886

7.9%

91

St. Louis, MO-IL

16.5%

18.3%

-1.8

$163,012

5.8%

92

Raleigh, NC

17.9%

19.7%

-1.8

$258,692

6.0%

93

Pittsburgh, PA

14.0%

15.8%

-1.8

$142,953

7.5%

94

Columbia, SC

17.0%

18.8%

-1.8

$136,586

5.7%

95

Wichita, KS

15.8%

18.3%

-2.5

$129,331

4.8%

96

Montgomery County-Bucks County-Chester County, PA

17.8%

20.4%

-2.6

$321,754

4.2%

97

Austin-Round Rock, TX

17.7%

20.6%

-3.0

$300,911

6.4%

98

Oklahoma City, OK

19.7%

23.2%

-3.5

$143,942

3.3%

99

Denver-Aurora-Lakewood, CO

21.0%

24.7%

-3.6

$401,539

6.9%

100

San Antonio-New Braunfels, TX

20.2%

24.0%

-3.8

$188,345

6.1%

 


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