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    What Does the Recent Rash of Price Reductions Mean to the Real Estate Market?

    What Does the Recent Rash of Price Reductions Mean to the Real Estate Market? | MyKCM

    Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country. According to the report:

    • There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros
    • About 14% of all listings had a price cut in June
    • Since the beginning of the year, the share of listings with a price cut increased 1.2%
    • This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

    Senior Economist Aaron Terrazas further explained:

    “A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

    What this DOESN’T MEAN for the real estate market…

    This doesn’t mean home values have depreciated or are about to depreciate.

    A seller may put a home worth $300,000 on the market for $325,000 hoping a bidding war will occur and an overanxious buyer will pay more than its actual value. That has happened often over the last few years. If the seller gets no offers and reduces the price to $300,000, it doesn’t mean the home dropped in value. It is still worth $300,000.

    Home prices will continue to appreciate over the next 12 months. In this same report, Terrazas remarks:

    “It’s far too soon to call this a buyer’s market, home values are still expected to appreciate at double their historic rate over the next 12 months, but the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”

    What this DOES MEAN for the real estate market…

    This does mean that sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

    Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

    Again, quoting Aaron Terrazas in the report:

    “The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.”

    Bottom Line

    Prices are not depreciating. However, if you want to sell your house quickly and with the least amount of hassles, pricing it correctly from the beginning makes the most sense.

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    Carin Nguyen

    Carin Nguyen takes the business of real estate very seriously and she has the track record to prove it. She holds the recent prestigious title and ranking of the #1 realtor in AZ for sides as awarded by the Wall Street Journal. Carin is an Arizona native and fully understands the complexities and changing landscape of the Arizona market. She has been in the real estate industry for over 10 year’s full time and comes by her expertise honestly, having honed it during years in the finance and mortgage industries. Education and knowledge is key in getting her buyers and sellers what they what. A rich resume built with a tireless commitment to her clients, undeniable proven past success and an uncompromised vision for the future create the recipe for complete customer satisfaction. Carin understands the potential emotional stress and sometimes life altering experiences felt by clients during the real estate transaction process. Carin is unyielding in insisting on complete professionalism from herself and her team while understanding that real estate is a personal business. She thrives on managing the details and individuality of each transaction and client. Her clients know that having Carin on their side means they have an advocate who cares about them and their needs. Carin is convinced that building relationships will ensure continued satisfaction and be reflected in future success. There is no denying what provides Carin with her constant strength. Her family is “at the heart of my motivation to push myself to achieve my goals and to be forthright in all that I do. My husband, Son, is my biggest source of support, my coach and my best friend. I am truly blessed with a loving husband and four great children who collectively strengthen my resolve to be the best at all my endeavors. I can be a wife and mother and still be a successful Realtor because I tackle everything with all that I have. My motto is ‘Working Hard To Get Homes Sold’ for a reason. I am thrilled that so many families have made me their real estate consultant.” A commitment to professionalism, an empathetic and understanding approach to her clients and an unstoppable and dependable force from her family all ensures success for Carin and most importantly, her clients

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