The sellers of more than 25% of residential properties currently on the market in the US reduced the asking price of their home at least once in the past 12 months, according to new research.
The national average price reduction was 10%, but more than 40% of the top 50 major metro areas saw average price reductions above 30%, the report from San Francisco-based real estate search firm Trulia shows.
Property investors with an eye for a bargain might want to start in the Northeast of the country which was the region with the highest rate of price reductions, with 29% of homeowners reducing their asking price.
The Midwest ranked second, with 28% of homeowners reducing prices, followed by the West (25%) and the South (24%).
‘With mortgage rates still low and the expansion of the tax credit to trade-up buyers, we could see significant inventory, both new and shadow inventory, hit the market during the next four to six months,’ said Pete Flint, Trulia co-founder and CEO.
‘Inventory levels this quarter are poised to be atypical of a normal real estate market, which could create tremendous pressure on sellers to price their homes competitively and move their property before the tax credit expires next April 30th,’ he added.
Individual markets that experienced noticeable rates of price reduction include Kansas City, which saw 59% of homes with reduced prices, Colorado Springs, some 43%, Omaha, with 39% of properties reduced, Louisville with 37%, and Milwaukee, at 30%.
Markets that experienced the greatest asking price declines include Las Vegas (34%), San Jose 25%, San Antonio 18%, Los Angeles 16% and Oakland 16%.
Luxury properties, those listed at $2 million or above, represent less than 2% of market listings, but with an average 14% price reduction, represent $28.1 billion in price declines, or about 25% of all home price reductions.