Home-price reduction levels have reached a new low, real estate search site Trulia announced Tuesday.
Of the site’s single-family and condominium listings, 21 percent that went on the market on or after Jan. 1 have experienced at least one price cut, the lowest share since the site started the survey in April 2009. The previous low was in December, at 22 percent. This month’s survey marks the second month of declines in price-reduction levels. The data do not include foreclosures.
"Historically low interest rates currently available and tax credit incentives are the ultimate price reductions for homebuyers. As rates rise throughout the course of the year, buyers will need to adjust their purchase-price ceiling," said Pete Flint, Trulia co-founder and CEO, in a statement.
The total amount slashed from homes fell 14 percent, to $21.2 billion, compared with $24.7 billion in December. Houses in the luxury market — defined as those priced at $2 million and up — were hit the hardest, with an average discount of 14 percent, compared with 10 percent in the nonluxury market. Luxury homes are less than 2 percent of all current listings on Trulia, but make up 26 percent of that total discount, the company said.
The average discount nationwide stayed the same — 11 percent off of the original listing price.
The number of major U.S. cities with price-reduction levels at 30 percent or more dropped 50 percent, to seven, compared with 14 last month. Those with largest price reductions include Los Angeles, Calif., at 46 percent; New York City and Jacksonville, Fla., at 36 percent; Memphis, Tenn., at 34 percent; and Minneapolis, Minn., and Honolulu, Hawaii, at 33 percent.
Regionally, the South saw the lowest overall level of price reductions, at 20 percent, up slightly from December’s 19 percent. At 22 percent, the West, Midwest and Northeast experienced a slightly higher level of reductions. Since December, the Midwest’s level has stayed the same, the West’s has increased from 20 percent, and the Northeast’s has fallen from a previous level of 25 percent.
Inventory levels of condos and single-family homes on Trulia’s site have dropped 4 percent, compared with a 9 percent decrease in December.
The continued drop-off might be attributable to the winter season, said Ken Shuman, a company spokesman. "It’s less competitive because there’s less inventory available," he said.
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