According to a press release published by Zillow on August 16, 2018, cuts to home prices in the largest 35 metros of the U.S. are increasing. This data helps to identify trends and shifts in the American housing market.
Nationwide Housing Price Cuts
Nationally, around 14% of all homes on the market experienced price cuts in June 2018. This is an increase in price cuts from the recent low of 11.7% experienced nationwide at the end of 2016, with about half of the 35 largest metro areas seeing value growth slowing or decreasing.
West Coast Home Prices Increasing
Compared to national trends, cities on the West coast are experiencing fewer price cuts, while experiencing increased prices in some metros. However, cities like Portland, San Diego, and Seattle are showing an increase in listings with price cuts.
Changes in Florida and Pennsylvania Housing Markets
Trends in Florida and Pennsylvania specifically have been mixed and do not always reflect the national housing market trends.
In Pennsylvania, for instance, Philadelphia saw fewer homes with price cuts in June 2018 (16.2% of listings) versus last year (17.9%). Pittsburgh also saw fewer homes with price cuts, going from 15.4% of listed homes receiving price cuts in June 2017 to 14.7% of listings getting price cuts in June 2018.
Florida’s housing market saw the opposite, and more closely resembled the larger national trend of increased price cuts. In the Miami-Fort Lauderdale metro, price cuts occurred with 14.9% of listings in June 2018 versus 13.4% of listings in June 2017. Orlando saw a slight increase in the number of listings with price cuts, jumping from 18.8% in June 2017 to 19.2% in June 2018.
Even with the growing demand for homes in metro Tampa, homes in the city experienced the largest increase in price cuts compared to other Florida metros. In June 2018, 22.2% of listings in Tampa saw price cuts compared to 20.2% in June 2017.
Price Cuts Showing Up in Higher Priced Homes
In 23 of the 35 largest metro areas, price cuts are more common in higher-priced homes than in low or average priced homes. In higher-priced listings within the 35 largest metros, price cuts increased by 0.9% in June, 2018, to 16.2%. This is compared to 11.2% of lower-priced listings experiencing price cuts in the same period. There is a disproportionate number of higher-priced listings with price cuts than lower-priced listings in the same areas.
Seller’s Market or Buyer’s Market?
Even with the current increase in homes receiving price cuts across the United States, it remains a seller’s market. The pendulum has not swung back in favor of buyers yet, although it is potentially headed in that direction. Right now, it’s too early to know if it will become more of a buyer’s market in the immediate future or remain a seller’s market over the next few months.
Despite price cuts, the average home value in the U.S. is still appreciating and is expected to continue to increase at double the historic rate by June 2019, according to Aaron Terrazas. The senior economist at Zillow states that in his opinion, it’s too early to say whether the market will switch or not, though he believes that the market is returning to a more stable, normal trend.
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