A new report release by Trulia reveals that, in December, the number of listings with at least one price cut grew to 27 percent which is a 23 percent increase from December 2009 when 22 percent of the listings had at least one price cut. In terms of the size of the price cut, that has remained about the same at 11 percent.
Number of cities with 30 percent or larger price cuts more than doubles in one year…
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. 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)
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% of Price % of Price % Y-O-Y Change
Rank City Reductions in Reductions in
December 2010 December 2009
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1 Fresno, CA 26% 12% 117%
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2 Long Beach, CA 36% 21% 71%
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3 Albuquerque, MN 35% 21% 67%
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4 San Diego, CA 30% 19% 58%
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5 Las Vegas, NV 33% 21% 57%
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6 Mesa, AZ 43% 28% 54%
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7 Phoenix, AZ 42% 28% 50%
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8 Arlington, TX 33% 23% 43%
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9 San Antonio, TX 25% 18% 39%
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10 El Paso, TX 22% 16% 38%
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Inventory plentiful…
“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. “
Click here for the complete report.
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