U.S. HOUSING MARKET RECOVERY BACKTRACKS WITH 23 PERCENT YEAR-OVER-YEAR RISE IN NATIONAL PRICE REDUCTIONS
Trulia.com Reports Increasing Disconnect Between Buyers and Sellers in Minneapolis, Mesa, Phoenix and Baltimore Where Price Reduction Levels Currently Exceed 40 Percent
SAN FRANCISCO, December 15, 2010 – Trulia.com, a top site for homebuyers, sellers and renters, today released its December price reduction report for the U.S. housing market. Nationally, the number of listings with at least one price cut grew by 23 percent from 22 percent in December 2009 to 27 percent in December 2010. Meanwhile, average reductions remained flat at 11 percent in a year-over-year comparison, although they have risen by 10 percent since last month.
Among the 50 largest U.S. cities, 32 experienced price reduction levels at 30 percent or higher this month compared to just 14 in December 2009. Minneapolis continues to have the highest levels at 44 percent. Moreover, Phoenix, Mesa and Baltimore also exceeded 40 percent – marking the first time four cities have reached this benchmark in a single month since Trulia began tracking price reductions in June 2009. Of the cities with the highest rate of price reductions last December, only Jacksonville and Columbus showed some signs of improvement with year-over year decreases by 5 percent and 3 percent respectively.
“The homebuyer tax credit successfully created an impactful short-term demand which temporarily stabilized prices, but stopped short of being a true spark for real estate recovery,” said Pete Flint, co-founder and CEO, Trulia. “As I said in the beginning of the year, job creation will be the strongest indicator that the housing market is turning around. Looking at the latest unemployment rate which rose to 9.8 percent this month, we expect prices will continue to decline between five and seven percent nationally especially in the first of half of 2011.”
Sellers Experiencing Tough Times within West and Southwest Regions
The 10 cities with the highest percentage change in price reductions between December 2009 and December 2010 are all in the western and southwestern states of California, New Mexico, Nevada, Arizona and Texas. At the top of the list, Fresno more than doubled its year-over-year price reductions by 117 percent while Mesa and Phoenix – which have two of the highest price reduction levels this month – increased by 54% and 50% respectively.
U.S. Cities with Highest Percentage Change in Price Reductions (December 2010)
“With 10 months’ worth of inventory on the market, homebuyers seem to feel no urgent reason to buy, despite still-low mortgage rates that are rising fast,” said Tara-Nicholle Nelson, Consumer Educator for Trulia. “On top of this massive supply-demand imbalance, sellers know to expect a drop off in already low buyer activity as the holidays approach. As a result, smart sellers know they need to make bold price cuts to create some urgency and sell homes which, otherwise, are simply not moving. ”
Trulia Price Reductions
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