One in Four Home Sellers Forced to Lower their Asking Price in September
It’s a little early for annual look-backs, but 2013 will probably be recognized as the year of the buying frenzy… until it wasn’t. Nearly every month, headlines reported home prices hitting or surpassing five-year highs, and fierce bidding wars made some sellers question whether they should have listed their home for an even higher price. But increasingly, market indicators suggest that sellers are losing control of the market. As found in our fall market survey, sellers are increasingly disappointed in buyer interest. Perhaps the clearest sign is the growing prevalence of sellers reducing the prices of homes after listing. In February of this year, only one in seven sellers reduced their listing price. In September, it’s one in four.
The 2013 trend is especially striking when compared with 2011 and 2012, both of which saw relatively stable rates of price drops throughout the year. While people assume that price drops exhibit a seasonal pattern where sellers lower prices on the older inventory heading into the fall, Redfin did not see that pattern in 2011 and 2012. Price drops are usually a sign sellers didn’t get the offers they hoped for when they originally listed or they simply didn’t assess the current market conditions adequately. It’s no surprise that our number one home selling tip is pricing your home right the first time.
Price Drops More Common In All Cities
Although some cities did exhibit lower rates of price reductions, every single metro area is seeing more in September 2013 compared to September 2012. Sacramento, Las Vegas, and Atlanta all have had double-digit year-over-year increases in the rate of price drops.
Year over year changes (all increases) in sellers resorting to price drops