Trulia.com’s December price reduction report found that the number of listings with at least one price cut grew nationwide 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 it has 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. In reevaluating the cities with the highest 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 quick fix 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.”
“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. ”
- For the full press release, click here.
- For full 50 city data chart of Trulia’s December 2010 and 2009 price reductions, click here.
- To learn more about Trulia’s price reductions and the methodology by which this study was conducted, click here.
- For an infographic visualization of Trulia’s December 2010 price reduction report results, click here.