Sellers of higher-priced homes are increasingly considering cutting original list prices as home-value growth begins to show signs of slowing in a number of large markets, according to an analysis by Zillow.
Zillow found that 14.2% of all US homes listed on its marketplace had at least one price cut in June. The figure is a slight increase from the 13.4% share in the same period last year but remains in line with the 12% to 14% range recorded since mid-2013.
If recent trends continue, Zillow cautions that price cuts could become more common in the coming months. Price discounts have become more pronounced on the local level, with two-thirds of the largest housing markets posting an increase in the share of listings with at least one price cut.
Trends in the higher end of the market appear to be driving the increase in discounted homes. Since the start of the year, 16.2% of listings priced in the top third of all homes listed for sale had a price cut, an increase of 0.9 percentage points. Meanwhile, there was a 0.1-percentage-point decline in the share of lower-priced listings with a price cut to 11.2%.
The increasing number of price cuts comes amid expectations that home value growth will slow down across the US. Zillow only expects a 6.6% annual appreciation rate over the next year. San Jose, Calif., Indianapolis, and Charlotte, N.C., are expected to see the slowest growth among the 35 largest metros.
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