Lowering the listing price is becoming the norm for sellers, as the market doldrums linger. But sellers in the lower price ranges are the most aggressive, according to a new report from Realtor.com.
Overall, nearly one in five U.S. home sellers reduced their asking prices in September, the site reports in its latest monthly market report. But 21% of those listing at $350,000 or less are cutting their expectations more often than sellers in higher-priced brackets. The least expensive houses accounted for 40% of all listings for the month, the most of any bracket.
From there, the number of sellers lowering their prices falls as price ranges rise. For example, in the $350,000 to $599,000, which accounted for 22% of the listings, 20% of sellers cut their asking price.
In the $500,000 to $750,000 range, accounting for 18% of the listings, 21% had price reductions. In the $750,000-$1 million bracket, 8% of all listings, 18% saw their prices cut. And 13% of the houses listed above $1 million, accounting for 12% of all houses for sale, experienced price drops.
The trend, the report said, “is consistent with more motivated sellers at the bottom of the housing ladder, who need to sell in order to buy their next home, compared to patient and/or price-anchored sellers at the top.”
The report did not say how much sellers are actually reducing their asking prices, or how often they have taken cuts.
Even in markets where buyers seemingly have the upper hand, price reductions tend to be least common at the top of the market, meaning that shoppers at middle or lower price tiers appear to be gaining more leverage than those shopping at the luxury end, the report pointed out.
However, the study found no uniformity in the trend in a market-by-market analysis. In Austin, Texas, for instance, price cuts are more frequent in the middle price ranges, while the rate of reductions were even across-the-board in Orlando. In New York and Miami, though, cuts were rather rare, suggesting, the report noted, that sellers “are either exceptionally patient or particularly price-anchored.”
Regionally, the Northeast stands out with “far fewer” price step-downs. Just 14% of the listings in that region were trimmed in September as compared to 19% in the Midwest and 21% in both the South and West. One reason: Sellers in the Northeast, where new home construction is limited, don’t have to compete as much with builders as those in other regions.
The Realtor.com report also noted that the typical house spent 62 days on the market before finding a buyer in September. That’s seven days longer than the same time last year and the 18th month in a row houses are taking longer to sell.
