The growing trend of seller discounts, and a scarcity of new listings, are a sobering reflection of the post-incentive housing market. Although US housing may escape a double-dip in prices, recent gains could be reversed in the period ahead – further separating strong markets from the weak. See the following article from Property Wire for more on this.
Residential property prices in the US increased 5.7% over the three months ending in August, but are down 2.2% and are now expected to stagnate and even fall during the rest of the year and into 2011. The latest figures from real estate data provider Clear Capital reveal that many of the 15 highest performing markets showed double digit quarterly gains. In particular property prices in San Diego increased 11.2% compared with the same time last year.
Most rises were seen in the Midwest and Southern regions but the picture is patchy with New Orleans, Cleveland and Columbus seen prices fall by more than 7%. And those markets that have gained are seeing a slowing of growth.
Overall, prices look poised to continue their deceleration with a likely drop into negative territory by the end of the year, according to Clear Capital’s senior statistician Alex Villacorta.
He believes that the outlook will continue to be patchy with the gaps between better performing and poorer performing markets widening. ‘We will start to see which markets are healthy enough to have a sustained recovery and which ones still have a way to go,’ he said.
‘But the price gains we experienced over the past two years are providing a cushion against prices going into double dip territory, meaning it is unlikely we’ll see prices below their 2009 lows this year,’ Villacorta explained.
‘As we head into the final months of the year it will be interesting to see how markets respond to an environment without any buyer incentives. We are observing local markets that are within a few miles of each other diverging in their response to the current housing climate with some showing strong stable growth and others yet to reach a price bottom,’ he added.
A separate report shows that nearly half of the houses for sale in the US are listed for less than what the seller originally asked for, with the average list price declining 7.1% in 26.
The report from internet real estate brockerage shows that in August 47% of houses for sale had a least one listing price reduction since first going on the market, up 3.26% from July’s level.
On average, home sellers are reducing prices twice to garner enough interest from prospective buyers, the report also shows. The average price reduction was $19,092 and the national median list price dropped 2.1% to $249,631 in August.
Less than 1% of the houses listed for sale were new listings in August, indicating that fewer sellers are entering the post-homebuyer tax credit market, according to ZipRealty vice president Leslie Tyler.
‘It appears that homebuyers are taking their time as they don’t feel a sense of urgency to make an offer, unless the price is right, and sellers are having to aggressively cut their prices to stay competitive in this market. We typically find if a buyer hasn’t walked through the door in 30 to 45 days, a seller needs to lower their asking price. If a home hasn’t had an offer in six months, it’s time to rethink the sale,’ he added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.