Anyone who reads housing market blogs, newsletters, or mass media reports has come across the claim that sellers are beginning to scale back prices. Altos Research called price reductions a big trend it is watching. It says they accounted for 24.1% of home sales the last week in May.
Some of the reports talk about a reduced listing price trend. Others cite price reductions with no explanation of what the reductions are from.
There’s no doubt there has been some downward pressure on listing prices in some places. But so far, it hasn’t happened in the Tri-Cities area, according to the Northeast Tennessee Association of Realtors’ weekly Market Pulse Report. In fact, the opposite is happening, for now.
The median – typical – listing price in January was $234,950. It has increased every month. Last month it was $274,900.
The average list price began the year at $346,440. It increased every month to $390,469 last month.
There are always some price reductions regardless of whether it’s a sellers’ market – like it is now – or a buyers’ market. During a normal market they account for about 35% of sales. Axios expects them to account for 30% of sales this month.
So far, there are examples of local price reductions. But they are not very common. At least, not yet.
Mays sold to list price ratio was 99.9%. That means most sellers got what they asked. However, there was a 9.1% ($24,000) difference between May’s typical listing price and the sales price.
Price reductions in the average number of USDA and Owner Financed sales and Trade/Exchange drove the typical market discount number. Most sales sectors were over list price.
The reports of sellers backing off prices vs. local data is one example of how the hyper-local effect can cause local market reports to differ – sometimes widely – from state or national reports.
Categories: REAL ESTATE