Starting June 1 one in four homes in the market would sell at a lower price after a price slash. Backed by its data, real estate online firm Trulia.com confirmed this last week.
Houses on sale underwent a whopping 23.6% price cut with an average reduction of 10.6% on the sale price. This would bring down the average price of a house to $43,650 says Trulia.com in its exclusive report sourced from Reuters.
Pete Flint, Co Founder and CEO of Trulia.com in an interview with Reuters opined that such price cuts would work like an effective bailout for the real estate market.
Confirming the real estate market’s woes, Mr. Pete said that several real estate firms are offering special deals and discounts on the houses up for sale. He said that such deals may work positively for the real estate market as they bring an impetus on consumer purchases and easy movement of inventory.
Trulia.com reveals an astounding $27.4 billion reduction of prices on all homes nationwide due for sale starting this June. Of this, Luxury homes costing $2 million and above have seen prices fall by 24% with an average price cut of 14.3% on the original price. In contrast to this 23.6% homes costing less than $2 million have seen a drop of 9.7% on the original asking price.
Mr. Flint said that the financial markets have seen a considerable amount of wealth eroding in the last year or two with sellers of luxury homes finding their potential buyers decreasing in number. Flint says that with the recent upward trend in the stock market, luxury home owners might find some relief as buyers will increase over time. The CEO’s advice for luxury home owners was to sell only if necessary.
26.2% of the detached homes on sale have seen an average reduction of 10% on their sale price. Condos for sale have experienced similar cuts with 27% in the market experiencing an average cut of 10.6% on original price.
Speaking on the recent real estate trends, Mr. Flint said that a home owner needs to understand how their home measures up to buyers in the market in a residential area, how critical and hence the urgency to sell the house fast and why they are putting up the house for sale.
Regions of Miami, Detroit and Las Vegas witnessed the highest reductions in selling price with an average cut of 15%, 16% and 23% respectively as per the report.
