Price reductions -- and a new real estate poll
Anyone who likes a sale will appreciate Trulia's new "price reduced" feature, which lets you query the real estate search engine for homes in your area with lowered asking prices. I searched on homes reduced at least 20 percent in the last month and got 48 hits. Including one property in the Pen Lucy neighborhood that Trulia says was reduced by more than half last month.
Redfin also has a price-reduced option, but it shows you everything reduced in the time period you pick -- it doesn't let you specify, say, only the 20-percent-plus drops. (And there's a lot of homes with at least small reductions in the last month. Even searching only for reduced foreclosures got me 133 results on Redfin.) ZipRealty, meanwhile, will show you all price reductions, period -- no asking for just the ones reduced, say, last week.
Have you seen other sites with handy price-reduced features?
All this got me wondering: Does "JUST REDUCED!!" whet your interest as buyers? Does "20 percent off" have the same appeal when it's applied to houses that it does for shoppers looking for a deal on jeans?
And I'm sure homeowners would like to know this: Do you buyers out there expect sellers to drop their asking prices -- regardless of what the price is -- as part of contract negotiations? Or would you be happy to pay the asking price if you think it's fair? (I get the impression that some sellers price their homes with the expectation that they'll be asked to reduce it no matter what they're asking.)
Take a moment to answer by way of the new poll:
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Comments
I attempted to buy a home about a year ago in Baltimore City. We (my wife and I) attempted to haggle with a couple of buyers on nice "starter" properties (Nice = Move-in ready, recently rehabbed, reasonably up kept).
None of the sellers had much wiggle room to their price, if at all. The biggest reduction we saw was about 4%, and the reasoning was always the same, "This is the lowest price they can accept to breakeven - they cannot sell at a loss because they don't have the cash"
We ended up not buying anything and are now just another pair of bitter (mildly angry) looky-loos waiting for the housing Armageddon to arrive.
From my experience in the local market - list price is about what you should expect to pay to get a deal done (not including anything distressed). I'm sure there are exceptions out there, but for my own sanity and time - I am waiting until asking prices for a homes get more in line with long term trends. It just doesn't make sense for me to buy right now.
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Posted by: Nick T. | June 1, 2009 3:36 PM
In my experience the only people that are reducing their prices are the ones that can afford to. I just bought a property for a 10% discount but the owners were willing to negotiate with us because of the market and they could afford to take a price reduction. If a seller bought in 2005-07 many people are not willing to negotiate because they can't afford to take a loss. I also see properties that have been sitting on the market for up to a year because the sellers are hoping for a miricle. In short sellers will drop their prices if they need to sell and if they can afford to.
Posted by: Buyer | June 2, 2009 10:09 AM
I think price reductions on homes are relatively meaningless.
The "original" price was set based on market coditions. The "reduced" price merely reflects market conditions. It does not make the house a bargain.
In Jamie's example of "reduced" jeans
people are aware of what jeans cost in general. A reduction on the price of jeans can truly be a bargain.
A reduced home price means that's all the seller can get. Home Sellers have to test the market and take what they can get
Posted by: Louis Cammarosano | June 3, 2009 10:52 PM
I just would like an answer to a very simple question. When the real estate market "recovers"(which is happening right now if you listen to experts like Jim Cramer and people who get paid to cheerlead for the real estate market) - are people going to be able to pay their mortgages this time around? Personally - I see more unemployment, lower wages for existing employees, impending skyrocketing inflation (which will cause way higher interest rates),banks not giving out money as easily, high housing inventory , the hidden inventory, etc as big challenges to prices still. What exactly is going to recover? It is rather concerning people's inability to accept reality.
A question to real estate bulls:
What are the reasons house prices will stabalize in the next few years?
Posted by: Paul Plainview | June 7, 2009 11:05 AM