Trulia released its Price Reduction Report for May 2010.
The May report showed that the percentage of listings with at least 1 price reductions is rising – now for two consecutive months. I suspect that once confident sellers are softening to meet buyers who are holding to their number. I would think that for us to see the number of discounts rise during the most active time of the year, the market is cooling. We would expect the number of discounts to fall during this period. It will be interesting to follow this metric once Trulia is able to compare year over year this summer.
I think that this metric will rise sharply in a few months after the tax credit expiration flows through the numbers. Pete suggests that we may be in for some turmoil ahead.
“With more than a year of the federal government’s involvement, we are now re-entering the free market system. As we readjust to the free market, we expect to hit turbulence in some markets,” says Pete Flint, Trulia co-founder and CEO. “We won’t know the true severity of the tax credit expiration until the conclusion of the peak home buying season in the summer months. Only then will we have a better sense if the U.S. housing market can stand on its own two feet.”
This is an interesting market quirk:
Luxury Market Unfazed by Tax Credit Incentive Price reduction levels for luxury homes (those listed at $2 million and above) continues to hold steady from last month with an average discount of 14% in price reductions. The average discount for homes priced less than $2 million remains at 9 percent.
Top 5 cities with highest number of price reductions
Top 5 cities with lowest number of price reductions