By: Dennis Norman
This morning Trulia, the online real estate search company, announced that “25.6 percent of homes currently on the market in the United States as of October 1, 2009 have experienced at least one price cut. More than one in four current listings on Trulia have been reduced in price for the fourth straight month. The total amount slashed from home prices is $28.4 billion, a $967 million increase from June 2009. The average discount for price-reduced homes continues to hold steady at ten percent off of the original listing price.
I think most agents are aware that not ALL homes for sale are listed on Trulia, in fact many MLS’s do not provide data to them however they do receive listing data from several MLS’s, real estate brokers and third party aggregators and is one of the larger online search engines so I do believe their data represents a fair sampling of the real estate market.
So if Trulia’s data is accurate and over a fourth of the listings have price reductions and the average reduction is ten percent that would seem to indicate we have a lot of overpriced listings out there. Who’s to blame for this? Are listing agents not getting it? Are they not up to speed on current market conditions? Are seller’s being stubborn and demanding agents list their homes above the true market value? Or, are prices continuing to fall requiring listings that don’t sell quickly to reduce their prices to stay “at the market”? My guess is a little bit of all of this is true. I think smart listing agents today are not going to waste their time on over-priced listings, but I do think that in many markets prices are very fluid…in my market, I’m seeing price reductions come at a much faster and more furious pace than before; many times from an underwater seller desperately trying to snag a buyer for a short sale before losing their home. Unfortunately this creates a snow ball effect on other listings in the market, many times forcing them to lower their prices to compete.
I guess the bottom line is, listing agents today really need to be on top of the market and price homes accurately for the market conditions at the time of listing, then constantly monitor the market and encourage the seller to make price timely price adjustments if necessary to stay priced “within the market”. There is no doubt listing agents are earning their commissions! Seller’s that decide to go it alone and sell their homes as a FSBO today I think are really setting themselves up for failure.
OK, back to the Trulia report…In the Trulia report the Northeast area of the U.S. saw the most homes reduced while the West saw the biggest cuts.
Five of the ten states with the highest percentage of homes with price reductions are in the Northeast — Massachusetts, Rhode Island, Connecticut, New Hampshire and New Jersey. One in three homes in these states has cut their list price at least once. Seven of the ten states leading the country with the biggest listing price cuts are in the West, where heavy foreclosures have taken their toll. In Nevada, Idaho, Arizona, Wyoming, Hawaii, Utah and California, cuts are an average of 13 percent off the original list price. Of the $28.4 billion slashed nationally, New York, California and Florida account for 35 percent of the total value of reductions.
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
[...] about 25 percent of the listings being overpriced”. Well if so you are correct, last week I did a post about Trulias report showing 25.6 percent of the listings on their system had a price reduction. Ah, [...]