[click to open report]

Trulia released its Price Reduction Report for June 2010.

22 percent of listings currently on the market in the United States as of June 1, 2010 experienced at least one price reduction, which is a slight decrease from 23.6 percent in June 2009. The total dollar amount slashed from home prices was $26.7 billion and the average discount for price-reduced homes continued to hold at 10 percent off of the original listing price.

Last month (May) I speculated that the number of listings with price reductions will rise sharply after the tax credit expiration flows through the numbers. Pete suggests the same thing in this release.

“Sellers are optimistic heading into the summer season because of the strong sales figures from the spring. The spring sales were fueled by the expiration of the tax credit and my concern is that this heavy activity is providing sellers with a false state of optimism,” said Pete Flint, co-founder and CEO of Trulia. “We are already starting to see rising inventory levels and I believe this will be the story of the summer. For the unforeseen future, buyers will continue to have the negotiating power and I expect we will see sellers get aggressive via price cuts throughout the summer.”

Is something happening in Minneapolis? For the second month in a row, Minneapolis, MN saw 40 percent of its listings reduced in price.

At 21%, the luxury market (>$2M) is consistent 22% for the overall market. * Price reduction levels for luxury homes (those listed at $2 million and above) continue to hold steady with 21 percent of homes seeing a price reduction, averaging 14%. Luxury homes account for 2% of the inventory and 25% of total dollar volume cuts. It consistent with the overall weakness at the high end of the US housing market brought about largely from the higher underwriting requirements for jumbo financing and the disappearance of the secondary jumbo mortgage market which had largely been run through the capital markets.

I was somewhat surprised to see Phoenix in the top five since price reductions had been so severe over the past 4 years.

Top 5 cities with highest number of price reductions

[click to open full list]

Top 5 cities with lowest number of price reductions

[click to open full list]

Trulia Home Price Reduction Report [Trulia.com]

Comments are closed.