Out of some 10M listings currently on Zillow, 14.2% were subject to price cuts. This percentage is up slightly from 13.4% during the same period in 2017.
According to Aaron Terrazas, Zillow’s chief economist, this slight uptick in price cuts falls within the same range since 2013. The difference, however, is, “price cuts could be increasingly more common in the coming months if more recent trends continue to hold,” said Terrazas. “Since the beginning of the year, the share of listings nationwide with price cuts has increased 1.2% points, greater than the January – June 2018 price cuts increase ever reported.”
Looking at 23 of the 35 largest metros analyzed, Zillow found that higher priced listings experienced a disproportionate share of price cuts. For example, 21.9% of top tier listings in Dallas experienced price cuts while only 8.7% of bottom tier listings had cuts. Top tier markets in Orlando and Houston also experienced similar percentages of price cuts. In South Dakota, Zillow found that20% of all listings experienced at least one price cut.
Zillow found that more affordable markets in Phoenix and Philadelphia saw fewer price cuts. San Antonio, median home price of $185,000, saw price cuts in 17.8% of all listings, down from 20% experiencing cuts in 2017.
In the midst of increasing price cuts, Zillow found that median home prices continued to soar by +8.3% to an average home price of $217,300 in 2018. In June 2018, however, prices increased more modestly compared to January 2018. Zillow anticipates growth to cool to 1.9% by the second half of the year.
Terrazas said, “The housing market has tilted sharply in favor of sellers over the past few years, but there are very early preliminary signs that winds may be starting to shirt ever so slightly…” to buyers.
Keep referring to Tim and Julie Harris’s Five Phases of a Changing Housing Market to help you determine where and when your market is “tilting.”
